Hike of 25 percent possible for county’s insurance
SYCAMORE – Huge insurance claims within DeKalb County government last year could lead to a major rate increase in 2013 if there are no significant changes to the health insurance plan.
Tim Kearns, an insurance consultant with the county, told the DeKalb County Finance Committee on Wednesday that the projected 9 percent increase to the county’s health insurance costs could climb to a 25 percent hike because of the large claims in 2011.
The county had eight employees make claims of more than $100,000, including one at $654,807.
The county also had 82 employees make claims of $30,000 or more, compared to 68 in 2010.
“Every five years you’re gonna have a very, very bad year,” Kearns said. “I will tell you that you had an off-the-chart bad year.”
The County Board could make changes to the plan that would knock off roughly 18 percentage points of any increase, which could make a 25 percent rate increase a 7 percent increase.
To realize those savings, the county would provide only a high-deductible plan to employees, which would decrease monthly premiums to $373 for family coverage and $161 for individual coverage but significantly increase deductibles.
Deductibles would increase from $1,000 to $5,000 for families and $500 to $2,500 for individuals in the high-deductible plan.
Slight changes would shift some burden from the county to employees, but it would reduce the rate increase by only 1 to 3 percentage points compared to the 18 percentage points of a high-deductible option.
One compromise that has been considered is offering the existing preferred provider organization plan with the high-deductible option.
That option would still save the county 18 percentage points on the employees who switched to the high-deductible plan, but it would cost an extra 4 percentage points on the already steep increase for those who stayed in the PPO.
Scott Newport, R-DeKalb and chairman of the finance committee, said offering both plans may be the best option because the high-deductible one would be attractive to many employees because of the lower premiums and health savings account that could offset some of the deductible costs.
“It’s a viable option,” he said. “[The high deductible] could be better for a lot of employees.”
Kearns said negotiations are ongoing with Blue Cross Blue Shield of Illinois to secure the lowest rate increase for the county.
He said before 2011, the county had done better than the average insurance increases, even receiving a small 3.7 percent rate increase two years ago.
But insurance companies use only the most recent years in calculating rate increases, and there have been a couple of $100,000 claims in 2012.
Charles Foster, R-Shabbona, asked whether other insurance companies would have better options; Kearns said it was highly unlikely.
“I don’t think there is going to be a lot of people beating down your door to get your business,” Kearns said.
He said the best-case scenario with no changes to the plan likely would be a 15 percent rate increase. The committee and full County Board will have to make some of the decisions for the plan in June.