The city's health care premiums will balloon 37 percent in 2011 to $25.7 million, a $7 million increase over this year's premiums for the same coverage, according to the city's employee benefits consultants, Benalytics of Marietta, Ga.
To reduce the increase, the commission was advised in a work session Monday to seek requests for proposals from insurance companies nationwide, with changes in plan design to include multiple options.
The second cost-cutting proposal would allow Human Resources Director Rod Powell to design a long-term strategy to address the causes of and remedies to the skyrocketing premiums, possibly including targeting specific illnesses.
Getting employees into a diabetes treatment plan, for example, could cut their insurance costs in half, from $8,800 a year to $4,400, said Benalytics strategic adviser Corey Sherman.
Changing from HMOs to point of service coverage would cut overall costs because a POS has higher deductibles, out-of-pocket maximums for families and individuals, and higher co-pays for physician services.
Sherman also stressed the need for communication and education in the process.
"People are going to be upset, after five years of a stable health plan," he said.
Commissioner Don Grantham said employees should get ready to pay more for less coverage because the government is not Santa Claus.
"In order to carry the same insurance that we have right now today, it will be close to a $7 million increase," he said. "I can't see us asking our taxpayers and property owners to come in and pay these additional dollars to maintain the coverage we have right now."
The city now pays 77 percent of employee insurance costs.
The city is fully covered by Blue Cross Blue Shield, which had to absorb $5 million in the cost of insuring city employees this year.
Powell said the city must redesign its plan by studying the coverage.
"We have to look at the cost," he said. "We have to look at the co-pays. When you walk in the doctor's office, it might be $25 or $30 overall deductibles. We have to look at all that stuff and come up with a formula that gets us within our budget. Yet still hopefully give employees good health care coverage.
"We're also going to try to come up with a situation where they have choices. So if you can afford sort of the stripped-down economy, you can pick that, or you can take the standard coverage, or you can buy up to the deluxe version."
The city must have a plan ready by January. Open enrollment will be in October and November.