Butler County secures $62.2 million health insurance deal [Journal-News, Hamilton, Ohio]

Oct. 28—Acknowledging the uncertainty of future COVID-19 health impacts, the Butler County commissioners agreed to hire Humana because the provider offered a two-year rate lock and maximum increase up to 6% for the third year for health insurance coverage.

The commissioners heard about numerous proposals from their new insurance broker the McGohan Brabender Agency last week and essentially decided then they wanted to switch from their riskier self-insurance model to traditional full coverage.

The decision Monday came down to choosing between their current carrier United Healthcare and Humana. Proposals from UHC and Humana had 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.

Commissioner Don Dixon said when dealing with taxpayer dollars they have to make certain they are making the best financial decision possible.

"I find it very hard to leave that third year guarantee on the table, I think it's a good deal ..." Dixon said. "The other thing floating around out there and nobody has the answer to this and they won't have until it actually plays out, but nobody know what this COVID virus means long term and what are the effects long lasting and then you've got the variant, it's very scary."

As the current provider UHC also offered 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. Humana did not offer a claims run-off benefit.

Just about the only thing that has caused consternation among the three commissioners in recent years is health insurance. Early on in the discussion Commissioner Cindy Carpenter said she favored sticking with UHC because there would be no disruption in service for their employees.

"With all things being equal or very close to equal I support staying with United Healthcare," Carpenter said. "Just because of the consistency to our employees, I think it makes their lives easier, families with kids, all the different doctors they may go to, you have to give a different insurance card and there is going to be a little work and challenges to that and probably mistakes that might be made."

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 paid an administrative fee and its own medical claims.

When the county was hit with the rate hikes in years past the commissioners absorbed the added cost but it wasn't a given, that decision was made annually. Dixon said he understands Carpenter's concern for the employees.

"It would be easier for our employees if we stayed where we are," Dixon said. "But I think it may be a lot easier on them in the third year when we know exactly what that increase is going to be, and they're not going to get an increase in their health care."

Carpenter changed her preference in the end. She said while she was hoping all the efforts the county has made to keep their employees healthy and claims low would continue, she understands "given the rocky past" they've had with insurance costs, securing the guaranteed third year increase was the best option.

The vote for Humana was unanimous. Commissioner T.C. Rogers told the Journal-News "we are at a point where we can offer some health security for three years." He added the guarantee is solid but they are not locked into the Humana contract for three years, they can change next year if they are unhappy.

Because they were almost sued by UHC last year the commissioners have been very careful throughout this process citing on the record they were following state statutes that allowed them to follow this process, with their broker negotiating with potential providers, rather than going through a competitive bidding process.

The county tried to change to traditional insurance last year but UHC threatened to sue saying the process was flawed because the former broker didn't put out a request for proposals. The commissioners approved a fully insured plan through the County Employee Benefits Consortium of Ohio (CEBCO) last October and then two weeks later rescinded that contract and approved staying with United Healthcare for another year.

Rogers asked one of their consultants Tony Malagari if he believes they have fully vetted this important contract.

"I've been doing this for 30-plus years, this is probably the most detailed review I have been involved in," Malagari said.

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