McLeod, 12 other counties might form own health plan

How can employers bring a halt to double-digit annual increases in health insurance costs?

For more than a dozen Minnesota counties, including McLeod, the answer might be to build their own insurance plan.

The McLeod County Board on Sept. 3 voted to help fund exploration of a new health plan for employees of the 13 member counties of PrimeWest Health.

PrimeWest Health is a joint venture, launched in 1997, serving about 25,000 Medicare and Medicaid recipients in western Minnesota.

McLeod County joined six other counties in committing dollars to the effort. The first year, the county would kick in $9,851 to help pay for a feasibility study and recruitment campaign. If the idea proves sound, the county will kick in another $34,144 in the project’s second year and $37,611 in the third.

“The earliest start date would be January 2016,” said County Administator Pat Melvin. “PrimeWest would be the insurance company, setting up the network and managing everything.”

According to Matt Magnuson, PrimeWest’s director of membership and program development, member counties have been concerned about dramatic annual increases in the cost of employee health coverage. “(Commissioners) asked, ‘Can we use the plan we own to manage those benefits, save money and still provide great service to our employees?’”

The proposed employee health plan would be a completely separate program from the Medicare/Medicaid plan. Currently, the 13 member counties have 5,000 employees who could be covered by the plan. Magnuson hopes other cities, counties and public entities would come on board, bringing the employee pool closer to 10,000.

Among counties that have heard the pitch, Magnuson noted, “We haven’t had one vote no.”

Along with McLeod, the counties on board include Beltrami, Douglas, Grant, Stevens, Pope and Traverse.

To make the venture worthwhile, Magnuson said, “The coverage has to be as good or better than the coverage that’s offered today. And we need to be able to save money.”

The goal would be to keep annual cost increases closer to the actual inflation rate – at 2 percent to 3 percent – versus current annual averages of 10 percent.

“The biggest advantage is the county owns the plan,” he said. “It becomes a fully transparent model. If costs rise, they’ll know exactly what’s causing that to rise.”

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