MU Health Care, Anthem negotiations have far reaching impact on employee benefits

The fallout from the failed contract negotiations between MU Health Care and Anthem is rippling far beyond Columbia — reaching counties more than 100 miles away.

As of April 1, more than 90,000 MU Health Care patients were left out of network after the two sides were unable to reach an agreement. MU Health Care serves patients in each of Missouri's 114 counties. While the effects are immediate for patients in Columbia and nearby areas who use the health care system, the disruption is statewide, driving up care costs for employees across the state.

The Ozarks Schools Benefits Association is a self-funded cooperative consortium for health care purposes. It provides employee benefits to public school districts across Missouri. It offers a range of insurance options including medical, dental, vision and life coverage at competitive rates by pooling resources from member districts.

OSBA, which represents more than 120 school districts across Missouri, could face future challenges as a result of the failed negotiations between MU Health Care and Anthem. Tim Ryan, OSBA president and superintendent of the Dallas County R-I School District in Buffalo, Missouri, explained how the breakdown may affect the association moving forward.

"Ultimately all of those (medical) bills that are paid out come from a self-funded plan," Ryan said. "So even though my district doesn't necessarily ... use that system, overall we share the same funds in our health care plan."

Ryan went on to explain that what costs an employee in a district closer to Columbia more money will also increase the cost burden on OSBA.

Ryan believes the failed negotiations will impact rates in the future.

"As we look to future years, we might have higher rate increases just based on this negotiation between Anthem and MU," he said. "Because ultimately it comes down to what we have in our reserves, and what is our anticipated cost for the upcoming year. So we might have larger increases in the future which would be the biggest piece that has an impact on all 120 school districts in our association."

Some Anthem members receiving intensive or ongoing treatment may still qualify for in-network rates at MU Health Care through a continuity-of-care plan, which provides a minimum 90-day window to apply.

"Ultimately it's going to cost our association more for any individual that receives health care through the MU Health Care system," Ryan said.

Anthem has contracts with other providers in mid-Missouri including SSM Health St. Mary's Hospital – Jefferson City, Jefferson City Medical Group, Moberly Regional Medical Center and Boone Health. Ryan is confident that Anthem and MU Health Care will reach an agreement eventually.

"It's a bottom line issue," he said. "We all share the funds, so ultimately there will be some sort of a rate increase in the future due to this more than likely, unless we can find other ways to reduce costs."

MU Health Care spokesperson Eric Maze said the health care system does not expect an agreement with Anthem in the future.

"We are not optimistic that we will reach an agreement with Anthem in the foreseeable future," Maze said. "The most recent proposal we received from Anthem doesn't differ meaningfully from what they offered in fall 2024 or from the terms of the agreement that ended in March."

"More specifically, it doesn't address the increases in expenses that MU Health Care and other health systems are experiencing, parity with the rates paid by other managed care companies in the region or parity with the rates Anthem pays other academic health systems," he added.

Maze pointed to rising premiums over the past decade as evidence of a growing disconnect between what employers pay and what providers receive.

He explained in regard to employee benefit increases, the Missouri Department of Commerce and Insurance's 2023 Health Insurance Market Report outlined how Anthem and its peers increased annual premiums to employer groups by as much as 37% over the last decade, but they did not pass on those rate increases to health care providers.

In addition to the financial impact to the OSBA, Ryan believes the failed negotiations will also impact trust for employees who use the health care system.

"I know most other people are probably like me when you find a doctor or physician that you really like seeing on a regular basis, it's very difficult to change. Especially if it's your primary care," he said. "So there's going to be a lack of trust there with MU."

MU Health Care maintains contract agreements with other major insurers including UnitedHealthcare.

"We understand that this is an incredibly difficult time for many of our patients with Anthem insurance and our goal remains to come to an agreement," Maze said. "It's important to note that MU Health Care remains in network with most major insurers."