County insurance director reports hikes

A rundown on the cost increases for the county’s health insurance program was presented Monday to county commissioners, employees and others by Mike Shelton, executive director of Washington Counties Insurance Fund.

The county at the start of this year faced an increase in health insurance rates of 19 percent coupled with a 5.74 percent extra rate hike when the insurance fund directors decided to drop its self insured pool format and contract with a health insurance provider.

Shelton’s visit also came while the county is considering a switch to another insurance carrier.

Kelli Campell, county human resources director, said the county is now focusing on offers from three carriers, Group Health, Cigna and Aetna. Each has offered different plans which are now being reviewed.

Campbell said the county expects to make a decision on whether or not to change carriers by the Sept. 19 meeting of the county commissioners.

At present, the county has approximately 30 people in the Premera composite rate plan which derived from the WCIF plan, 135 employees enrolled in the Group Health plan which provides tiered coverage depending on how many family members employees opt to enroll. Another 16 employees have waived health insurance.

Campbell said the employee coverages are negotiated with the employee bargaining groups. All but one of the bargaining groups have negotiated coverage packages. The exception is the jailers and sheriff’s support staff union which is covered through a teamsters program.

Monday Shelton, who is a former Island County commissioner, reported WCIF now represents 15 counties and other government agencies.

“Our goal is to get larger,” he said in response to a question from Commissioner Pat O’Neill.

Shelton earlier described the “power of numbers” which allows WCIF to even out claim costs among all employees in member counties.

He also said two counties, Skamania and Lincoln, have dropped WCIF in favor of other plans.

Shelton said the WCIF board, made up of commissioners from other counties, bumped the rate for the current year by 19 percent last year after insurance claims from employees exceeded income from premium payments.

“Starting in 2008 the claims started to ramp up, “ Shelton explained. He added by 2009 the WCIF board realized the jump in claims was not a temporary trend. Higher utilization of the health coverage plans and larger claims began to increase the loss to the fund until the fund’s board decided to increase the pool rate by 19 percent for 2011.

In November, the fund board decided to convert to coverage by a carrier and signed with Premera. Premera later added 5.74 percent to the rate figure.

Shelton said that Premera added the 5.74 percent to cover a state tax which is charged against private providers. The tax had not been charged against the pool which was made up of public groups. Later, when questioned, he said part of the Premera rate hike derived from the company’s review of the WCIF claim filings in the last months before WCIF decided to move out of the pool funding format.

County Commissioner Mike Largent, who sits in the WCIF board, pointed out their decision last year to drop the pool format meant members also eliminated the risk entailed by covering claim costs out of premium funds coming into the pool.

The WCIF board last week conducted its annual rate setting meeting with the Premera rate hike starting for 2012 at 9.75 and the Group Health Rate hike set at 7.1 percent.

Most of county employees have opted for the Group Health tiered plan which was not involved in the conversion of the pool fund to Premera.

Shelton said he believes the pace of rate hikes reversed for last year because the WCIF members’ total claims dropped to 84 percent of the income from premiums. He added Premera essentially provided the group a break by figuring its rate hike for next year off the first six months of claim rates for this year.

If Premera had figured the rate request based on prior year results, the rate hike for 2012 would have been 25 percent, Shelton said.

When asked about counties who have dropped out of WCIF, Shelton stressed the power of overall numbers among the pool members.

“I’m not saying that you cannot do better,” Shelton said. However, he noted Klickitat County is now looking at a 24 percent hike in premium costs because individual claims costs from its employees have jumped.

Walla Walla county left WCIF in 2009 and faced a 30 percent hike in 2010 for the same reason. Walla Walla came back to the WCIF this year where it was able to take advantage of the “strength in numbers” from the claim averages.