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Health care costs on rise for Augusta

Higher premiums, cuts in coverage projected

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City of Augusta employee health insurance costs are projected to rise a staggering $6.9 million next year, and the prognosis for maintaining the same coverage they had this year is grim.

However, Augusta commissioners say they won't raise taxes to make up the shortfall.

Employees can expect to pay more in premiums and have higher deductibles for less coverage, commissioners were told last week by their employee benefits consultant, Benalytics of Marietta, Ga.

Blue Cross Blue Shield of Georgia will pay $5 million more than anticipated covering the 2,500-person Augusta work force, whose claims the company had projected would run $18.1 million but which will be more like $23.4 million this year and $25.7 million next year.

The projections are for active employees and retirees younger than 65. Premium cost estimates for retirees older than 65 were not given during the presentation, during which commissioners directed Human Resources Director Rod Powell to devise a plan with options to bid out to insurance companies nationwide.

One option not on the table is higher property taxes to maintain the current coverage, said Commissioners Bill Lockett, Alvin Mason, Don Grantham, Joe Bowles, Joe Jackson, Corey Johnson, Jimmy Smith and Jerry Brigham.

"I would not be willing to increase taxes," Lockett said. "Human resources is going to have to go out and see what is available. And at that juncture, each individual employee is going to have to decide if they want to buy a Mercedes-Benz, a Chevrolet or go to the bottom and buy a Volkswagen."

To make up the government's portion of the $6.9 million premium shortfall, commissioners would have to raise property taxes 1.17 mills, which would add $41.13 to the tax bill on a house valued at $100,000 with homestead exemption.

"We may have to raise premiums," Johnson said. "We can't raise taxes. We can't make everybody pay the costs for a portion of the constituency base of the county. It's a tough situation. There's no easy way to deal with it."

Employees are going to be upset, especially if the coverage is reduced by $6.9 million, Powell said.

Grantham said Powell will give commissioners several options with increases in the percentage of the premium employees pay.

"Right now, the government is paying 77 percent, and the employee is paying 23 percent," he said. "More of the cost is going to have to be borne by the employee, and the deductible they pay will increase. With a $7 million increase in premium costs, we have got to explore all avenues, and a portion of our coverage is going to have to be self-insurance."

SELF-INSURANCE ALLOWS a government to protect itself by buying coverage for catastrophic costs but pay claims from money it puts in an escrow account. In such an arrangement a third party, such as Blue Cross Blue Shield, administers the program.

"A drawback is that if the money in the escrow account runs out before year's end, you're out of luck," Grantham said. "So it's a gamble."

Blue Cross Blue Shield of Georgia gambled that Augusta's costs would not exceed $18.8 million and lost. Because the city is fully insured, the company had to make up the difference.

Johnson and Jackson said the city should consider becoming self-insured and reaching an agreement with University Hospital or Medical College of Georgia Hospital to treat city employees at reduced rates.

"Why couldn't we be self-insured and work a reduced rate with University Hospital?" Jackson asked. "Why couldn't we approach University Hospital or MCG? The options are out there."

Johnson said the city has an opportunity to look at building partnerships with University, MCG and Trinity Hospital.

"There's got to be some way we can implement using local facilities as another means of managing the health care of our employees," he said.

Bowles said he has been saying since he came on the commission that commissioners need to tier rates based on an employee's health and wellness.

"Employees that take care of themselves need to be rewarded, and those that don't need to bear the brunt of the costs," he said. "Overall, the healthier your employees are, the lower your insurance costs are. We've done the opposite keeping Blue Cross Blue Shield. We're getting exactly what we deserve."

LT. BRYAN PATTERSON of the Richmond County Marshal's Office said Augusta's health insurance costs have been stable for the past few years and that employees had to see rates were going to increase.

"Employees are going to have to pay an increase in premiums," he said. "It's no different than when the insurance on your car goes up. It's going to hurt to pay more, but try buying insurance on your own."

Employees should look at the increase the way other taxpayers do, he said. "If they're not employed by the city, they say, 'I'm just paying additional taxes to support somebody else's health insurance.' "

Reach Sylvia Cooper at (706) 506-8875 or sylvia.cooper7@augustachronicle.com.

2010 full-time Employee Benefits Plan

HMO/PLAN 1

Single: $40.33 semi-monthly

Employee plus one: $80.61 semi-monthly

Family: $120.98 semi-monthly

POS/PLAN 2

Single: $49.24 semi-monthly

Employee plus one: $98.49 semi-monthly

Family: $147.73 semi-monthly

DENTAL

Single: $1.94 semi-monthly

Employee plus one: $3.94 semi-monthly

Family: $5.91 semi-monthly

VISION

Single: $3.07 semi-monthly

Employee plus one: $6.15 semi-monthly

Family: $8.45 semi-monthly

LIFE INSURANCE: $50,000 free life provided. Optional coverage offered at five times base salary up to a $400,000 maximum.

LONG TERM DISABILITY INSURANCE: Ensures continuation of pay when you cannot work because of long term disability. Maximum benefit amount is 60 percent of your monthly base salary.

GMEBS Pension Plan: 4 percent of gross wages are contributed to Defined Benefit Pension Plan (1.65 percent of salary for each year of service).

FLEXIBLE SPENDING ACCOUNT: A pre-tax spending account to pay for non-reimbursed medical expenses or child care expenses incurred within the plan year.

PAID ANNUAL LEAVE: Vacation time is accrued biweekly based on date of hire. Vacation increases with length of service.

SICK LEAVE: All full-time employees accrue one sick day per month.

DIRECT DEPOSIT OF PAYROLL CHECKS: You may elect to have your check directly deposited to the account of your choice.

CREDIT UNION: Augusta-Richmond County is affiliated with the CSRA Federal Credit Union. All employees are eligible to join.

AFLAC: Supplemental insurance policies are available to eligible employees as an optional benefit through the American Family Life Assurance Co. Premiums are payroll deducted.

CONCERN (EAP): Full-time employees and their dependents are eligible to participate in the city's employee assistance program. Trained Counselors (who are not city employees) provide confidential therapy at no charge to the employee.

WELLNESS FACILITY MEMBERSHIP: Affordable rates offered to eligible employees to join Health Central, the Family Y, Omni Health & Fitness, The Augusta Municipal Golf Course, The Augusta Aquatic Center and/or the Newman Tennis Center by payroll deduction and reimbursements.

***These benefits are subject to change. If there are discrepancies, the legal documents detailing our benefits will control.**

Source: City of Augusta Human Resources Department

Comments (15) Add comment
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corgimom
33993
Points
corgimom 07/31/10 - 09:56 pm
0
0
"Johnson and Jackson said the

"Johnson and Jackson said the city should consider becoming self-insured and reaching an agreement with University Hospital or Medical College of Georgia Hospital to treat city employees at reduced rates."

Why would University Hospital and MCG do that? What would they stand to gain from it?

iletuknow
8
Points
iletuknow 08/01/10 - 12:39 am
0
0
Kickbacks from pharmaceutical

Kickbacks from pharmaceutical companies for a start.

lsmith
105
Points
lsmith 08/01/10 - 04:33 am
0
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I'd be interested in knowing
Unpublished

I'd be interested in knowing how much total premiums were paid to blue cross blue shield. Did they lose money or did they just NOT MAKE as much as they'd have liked. The city should open up their insurance business to any qualified company that wants to quote. The city used to have United Healthcare and by and large they are a very fair and reputable company.
Not to worry, Obama care is coming to the rescue. $850 per month, $3,000 deductable and $6-8,000 out of pocket. If you're insured and get sick they ain't going to pay for squat till you get REALLLY sick and need hospitalization. What a lousy future for the aging population!

disssman
6
Points
disssman 08/01/10 - 07:29 am
0
0
I am just glad that employees

I am just glad that employees had a spokesperson to represent them in the discussion about their pay and benefits. It is refreshing to see people have a say in what affects their lives. Now lets see, a meter reader makes 10.50 an hour, why they are making big bucks and can afford a raise in premiums and a raise in their deductible.

disssman
6
Points
disssman 08/01/10 - 07:31 am
0
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Ismith just where did you get

Ismith just where did you get those figures? Personally I believe that the Healthcare plan is the only salvation for a 10.50 an hour meter reader.

lsmith
105
Points
lsmith 08/01/10 - 09:25 am
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dissman: many working people
Unpublished

dissman: many working people are already facing the costs I referred to above. City employees have a sweet deal compared to most even if it goes up. My own employer provided plan costs $700 per month with a $4000 deductable/out of pocket. I have friends in good health buying on the free market paying over 800 for 70/30 coverage which begins only after paying the 3000 deductible and a $5000 out of pocket.
Every year the premium goes up, the deductible goes up, the copays go up, the out of pocket goes up and the coverage goes down. Less and less is covered each year during re-enrollment. All these add-on increases are designed to make it hurt bad enough for you so you second guess yourself as to whether or not you will go get something looked at. The insurance companies are betting that the deduct/copays/out of pockets are strong enough you'll just wait it out. Maybe it's nothing serious, then again maybe it's heart attack or cancer.
From what I've read in every report is that all healthcare plans, employer provided, privately purchased and medicare are going to cost a great deal more. Is there any reason to believe that the coverage and deductibles are going to get lower? Not hardly. And a new twist is NOW your previously untaxed payments to healthcare will be fully taxed, another 200.00 pe month out of my paycheck.
Also in the works is a drastically reduced size of doctor/hospital network who negotiate low ball deals for volume work. This WILL become popular with employers desperate to limit their costs. And employees squeezed by exhorbitanly high alternate rates will opt for the limited choice of dr/facility in lieu of being scalped for the other, they simply won't be affordable. This means many of us will not have access to our long time doctors unless we want to pay the out of network penalty.
I remember a few years back Cigna and United Healthcare were no longer putting university hospital in their network because of failed rate negotiations. I was forced to go my own in keeping my University network intact. It' guaranteed this will become more prevalent in the future.
Since the Obama care is not fully documented yet, (it's being designed as they go under a blank check) we have no idea on how bad it's going to be, but no concrete details that have been revealed are working out to be good for Americans. It will of course be really good for those who don't work, are at poverty level or in the country illegally. The working stiff is going to get really stiffed.

Riverman1
86836
Points
Riverman1 08/01/10 - 09:25 am
0
0
The problem is that health

The problem is that health care costs projected out for county and state workers are unmanageable. As the number of retirees increase and live longer along with rising medical costs, it will be impossible for local and state government to foot the bill.

There is a study somewhere that says the health care costs for state workers will equal the entire current budget in 20 years. The only solution is to start cutting back the state/county contributions right NOW to current employees and RETIREES. By starting now, it will be possible to gradually cut the contributions and give workers time to adjust.

dani
12
Points
dani 08/01/10 - 11:11 am
0
0
So how is the Obamacare going

So how is the Obamacare going for us ? The idea that the plan would reduce cost has always been a hallucination dreamed up to get support from the sheep.

dani
12
Points
dani 08/01/10 - 11:17 am
0
0
Obamacare has NO control over

Obamacare has NO control over the premiums that Blue Cross Blue Shield charge. Didn't we know from the beginning that health insurance would be even less affordable and we would have no choice but to go to a government run program.

Fiat_Lux
15901
Points
Fiat_Lux 08/01/10 - 04:35 pm
0
0
If only they had decided to

If only they had decided to allow insurance companies to sell across state lines, this discussion never would be happening.

soldout
1280
Points
soldout 08/01/10 - 04:57 pm
0
0
Alternative care and more

Alternative care and more self care is the solution.

chascush
0
Points
chascush 08/01/10 - 07:04 pm
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corgimom, ‘Why would

corgimom, ‘Why would University Hospital and MCG do that? What would they stand to gain from it?’
Just a bit of education for you. Most large companies ARE self insured. They use insurance companies as paper pushers. The insurance company gets a % for handling the paper work. The company makes the rules as to what will be paid. A lot of people that work for large companies complain about what the ins. company is paying but all they are doing is following what the employer set up.

chascush
0
Points
chascush 08/01/10 - 05:23 pm
0
0
lsmith, ‘Not to worry, Obama

lsmith, ‘Not to worry, Obama care is coming to the rescue.’
The city and business can expect the cost of medical coverage to keep going up.
Somebody has to pay for the dead beats. Obamacare is just another handout for the free loaders. It is NOT FREE; so the people that have health coverage now will be paying a lot more. All you working people out there say thanks to Hussein.
The health care that Hussein wants to copy is Great Britain. In the last couple of weeks Great Britain has said they will decentralize their Bankrupt Healthcare System.
As to you Hussein supporters drink some more Obama kool-aid.

lsmith
105
Points
lsmith 08/01/10 - 07:20 pm
0
0
If the obama care plan is not
Unpublished

If the obama care plan is not defanged before it's fully implemented the American working man is going to be in a world of hurt. The whole emphasis in obama care has been from day one to find a way to provide health care to those who do not and never will pay for it. Guess who's going to pay? My current health care plan is only a bargain if you're seriously ill, and I mean like tens of thousands of dollars in hospital and doctor fees. In the meantime, even if healthy insurance premiums, deductables, copays and out of pocket expenses translate to $12,000 a year, and next year even if the policy, rates and coverages remain the same,(which they won't) thanks to obama another 27 percent is added to pay taxes on it. What an absolute sham!!!!!!!!!!!!!!!! Was this little tidbit exposed during the debate.......NO!!!!!!!!!

Chillen
17
Points
Chillen 08/01/10 - 10:34 pm
0
0
My policy premium went up 20%

My policy premium went up 20% this year to almost $475/month with a $5000 deductible that we never meet. And the taxpayers aren't bailing me out, I pay for this myself.

Increased costs need to be negotiated and if unavoidable, passed to the end user, the employee - the one who ultimately benefits from the policy. No taxpayer money should be used to cover this increase.

sonic_imperial
0
Points
sonic_imperial 08/01/10 - 10:37 pm
0
0
Wow, even with the increase

Wow, even with the increase that is super cheap insurance, even for a family. I could only dream of paying insurance that low.

blondietoo007
0
Points
blondietoo007 08/03/10 - 06:11 pm
0
0
The county had a "deal" with

The county had a "deal" with University in the old days and they couldnt afford it; the county had United and not only could United not manage to pay the claims correctly but instead of increasing premiums at the year anniversary they increased the premiums within 9 months b/c their claims were so high.Copays and deductibles are not designed to be a penalty they are designed to make us SMART consumers - shop wisely with your money. The problem is that people expect something for nothing, have you stayed in the hospital lately, look at your bill? That two day vacation most likely cost 10,000 - EASY! All I can say is this should be interesting to watch!

fyafyta390
0
Points
fyafyta390 08/05/10 - 10:00 pm
0
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What will end up happening

What will end up happening here is that the employees will compare their premiums with those of their spouse's job. Whichever is lower, that is the one they will participate in. Ever wonder why emergency responders are in such a fowl mood? They are constantly dealing with the abusers of the system. Who have run the costs of healthcare up so high that the responders can not afford their own health insurance. Imagine being an EMT, firefighter or deputy repsponding to a "cardiac arrest" call, then upon arriving on the scene, finding out that the caller needed a "ride" to the hospital to get some asthma meds and they didn't have $20 for a cab. Who do you think pays for that $650 (ambulance) cab ride? Not the caller. These types of abuses of the healthcare system occur DAILY. Also, what about the people that use the ER as their primary care physician. That is why the ER co-pays are so high. It's designed to send patients to their PCPs ($30-$60) as opposed to the ER ($300-$750).

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