Butler County probably returning to risk-free traditional insurance: What that means [Journal-News, Hamilton, Ohio]

Oct. 22—Health insurance has always been risky business for Butler County and the coronavirus pandemic hasn't helped, so the commissioners are leaning toward returning to a $20 million traditional policy.

In the wake of a glitch last year that prevented the commissioners from switching to a lower-risk health insurance plan, they hired a new broker, McGohan Brabender Agency, to help them navigate the unpredictable benefit market earlier this year.

For the past several years the county has been self-insured but wanted to test the market to see how much a traditional policy might cost. Shelly Payton, director of account management, presented the commissioners with a market analysis and plan proposals Monday.

The county's current provider United Healthcare offered a $2.4 million plan reduction — or $17.9 million — if the county stayed self-insured next year. UHC reduced the budgeted amount for claims but fixed costs would increase $104,521. A fully insured plan would cost $20 million. They received four other quotes for full insurance ranging from $21 to $18.7 million.

Commissioner T.C. Rogers was skeptical about the estimated price reduction from United Healthcare, especially since people are just now really getting back to their normal medical routines post-pandemic. He asked Payton if she thinks county employees are "11.9% healthier." She said their modeling assumed a 3 to 5% cost reduction.

The county went to a self-insurance model in 2017 after several years of double-digit percentage increases for insurance coverage. Some large, unusual claims over several years drove those increases, including a single $5 million claim in 2013 and a $3 million claims month in November 2014.

The commissioners felt they had more control under self-insurance, where the county pays an administrative fee and its own medical claims. Claims have been lower in recent years and there is a $5 million balance in the self-insured fund to pay claims, but times have changed.

"If this COVID variant thing comes around and I have 50 people on respirators, in critical care, ICU that number will go through the roof," Commissioner Don Dixon said about the $2.4 million self-insured reduction quote. "And we have to pay it."

Rogers also added that if they stay with the self-insurance model they really need to have an insurance department which means adding more staff.

They haven't voted but all three commissioners appear inclined to switch to traditional insurance coverage, "I don't feel it's worth the risk staying self-insured," Dixon said.

"We represent the taxpayers and trying to figure out their tolerance for taking a gamble I've found it not to be too high, they want to go slow, steady, they want to know what's coming. Taking this bet at the craps table doesn't work for them," Dixon said. "This gives us an opportunity to lock in rates for our employees, with no increases."

So the next step is choosing a carrier, the lowest quote was $18.7 million from the County Employee Benefits Consortium of Ohio (CEBCO) or a $1.6 million decrease from the current contract.

Part of the reason for the broker change involved CEBCO. The commissioners approved a fully insured plan through (CEBCO) last October and then two weeks later rescinded that contract and approved staying with United Healthcare for another year, because UHC threatened to sue, saying the process was flawed because the former broker didn't put out a request for proposals.

Proposals from UHC and Humana have identical bottom line costs of $20.3 million. Both companies locked the rates in for two years but Humana added a third year with an increase capped at 5.9%. Both companies offered a one-month "premium holiday" valued at around $1.7 million.

County Administrator Judi Boyko told the Journal-News CEBCO isn't in the running because it didn't offer the premium holiday — which means all three are basically even — and a 3-year contract was required but "it was a nice reduction in the first year but no guarantee of what increases could be in years two and three."

Payton told the commissioners there is a benefit to staying with UHC because there would be no disruption staying with the same company because employees wouldn't need to make changes. Plus they have agreed to cover claims that are incurred but not yet paid in the last three months of this year, which is an estimated $400,000 value.

She said the Humana offering is also attractive and they promised they could have everything up and running Jan. 1.

"With Humana you're given a rate cap of 5.9% in year three," Payton said. "From what I've heard from you that holds a lot of value."

The commissioners are expected to vote on the two proposals next week.

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