How the coronavirus pandemic impacts Butler County health insurance costs

Sep. 28--The coronavirus pandemic has made budgeting for 2021 health insurance costs tricky for those Butler County governments that self-insure, some are seeing double-digit increases.

The Butler County commissioners are still finalizing the plan for 2021, but Commissioner Don Dixon said the county is looking at a "very small" increase for next year.

"Our insurance should not look that bad this year," Dixon said. "I think it could be a small increase, very small depending on what happens in these last months. We're behind a month or two in the data we see from the payouts and then we have the rest of the year to run out and who knows what might occur because some of these operations and elective surgeries were put off and on hold."

County Administrator Judi Boyko was projecting an 8% increase for next year. The commissioners approved a $20 million health insurance budget for this year. Boyko said as of Sept. 14 the county has had almost $12 million in claims, about $1 million more than a year ago.

Human Resources Director Laurie Murphy said the estimates for next year are lower mainly because the proposal for fixed costs estimated by their broker were reduced, but predicting claims experience in this COVID world is tricky.

"We were concerned about what's going to happen the rest of this year by way of costs because the doctor's offices are opening, the elective procedures are being done now," she said. "So it's so hard to project what's going to happen the rest of this year. We don't want to be too conservative but we don't want to be unthoughtful and things could blow up."

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.

Under the self-insured plan, the county pays an administrative fee and the claims itself out of county coffers. There is a single claim limit of $175,000 and a total limit of $20.8 million, so any bills over those amounts are paid by United Healthcare.

The other jurisdictions in the county that are self-insure are Fairfield, Liberty Twp., Hamilton, Middletown and Oxford.

Similar to the county, Hamilton has been quoted a zero percent increase in health insurance for next year at $7.3 million, according to Tim Werdmann, executive director of Internal Services for the city. He said under self insurance they have experienced "low single-digit" increases. Providing full coverage for "maintenance medications" so their employees can manage chronic illnesses has helped keep costs low.

"I also believe that our wellness program, in which nearly 70% of our plan members participate, is a major factor in our recent success in managing costs," Werdmann said. "While I am somewhat concerned about a potential spike in utilization as COVID restrictions ease, we are trying to take that into account and remain conservative in managing our plan."

Middletown Director of Administrative Services Susan Cohen said while claims have been 17% lower this year due to the pandemic, next year will likely be a different story.

"We are experiencing lower claims this year and definitely anticipate that this will rise next year as more elective medical visits occur," Cohen said. "According to our health care broker, we anticipate costs are going to rise roughly 20% over where they are currently."

She said the projected cost of insurance this year is $5 million based upon costs of $3.3 million spent as of the end of August.

Liberty Twp. hasn't shopped its insurance yet but Public Information Officer Caroline McKinney said they have been told to expect a 15% increase for next year. She said while they haven't had any catastrophic claims the total claims jumped $400,000 to $1.4 million between August 2018 to this year.

In Oxford insurance claims went from $1.8 million in 2019 to $445,259 so far this year but City Manager Doug Elliott said that is due to some huge claims in 2018 that spilled over into 2019.

"Oxford did not experience a significant decrease in health insurance costs as a result of the earlier ban on elective surgeries," he said. "Also, since the lifting of the ban, the City has not experienced a significant increase in health insurance costs."

He doesn't expect any big changes for next year.

Assistant Fairfield Manager Dan Wendt said they could not comment on health insurance at this time.

West Chester Twp. uses Aetna for its insurance and the trustees just renewed a contract with a 4.9% rate increase, a cap that was negotiated last year. If all employees keep their same plans the cost will be just shy of $5 million.

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