High deductible health insurance policies could save Iowa County money

MARENGO — As insurance rates rise, the Iowa County Board of Supervisors is looking at options to keep insurance costs as low as possible.

After meeting with Rick Jedlicka of North Risk Partners, in Solon, Iowa County’s insurance broker, Supervisors Abby Maas and Jon Degen suggested the county look into changing the plans it offers its employees.

“Pharmacy is driving our rates, not actual hospital visits,” said Maas during the Feb. 13 meeting of the Board of Supervisors.

“Our drug claims [last year] were $1.1 million,” Maas said. “So that’s what’s driving our increases every year.”

Costs increased by more than 13% last year, Maas said.

Degen and Maas shared with Supervisors Chris Montross, Seth Meyer and Kevin Heitshusen what they discussed with Jedlicka, but final decisions won’t be made for months.

One option that would decrease costs would be to increase prescription co-pays for specialty drugs, said Maas. The specialty drug costs are driving up rates for everyone in the county, she said.

“If your prescription is over $400,000 you’re paying $100 to refill it,” said Maas. “So I think we need to have a little bit more buy-in, and a little more ownership into the prescription part.”

The county would not increase co-pays for generic drugs.

The county doesn’t want to make changes that are too drastic, said Maas, but she and Degen said the county should consider a high-deductible plan with a $3,400 deductible. Employees with high-deductible plans may set up tax-free health savings accounts to cover the deduction and other medical expenses.

“It’s a bank account, literally,” said Maas. The money belongs to the employee and therefore rolls over every year and stays with the employee even when employment with the county ends.

“And you can put more in than that $3,400,” said Degen. “If you keep it until you retire, you can use that money for insurance and supplementals after you retire.”

  Buy Photo

Degen said three or four people have already inquired about a high-deductible plan and wondered why the county didn’t have one available.

“It could save us money,” said Degen, and it’s still good insurance. Some employers provide matching funds to employees’ HSAs, he said. The county could consider that.

Maas said if the county added $50 a month to employee HSAs, the county would still spend less than it’s spending now on insurance.

Once people understand the option, they may want it, said Degen. Some of the current plans seem to be a waste of money, he said.

More than 90% of the people on the county’s insurance plans are using less than $1,000 a year, said Maas. Employees who chose the $750 deductible plan are losing money, she said. They are paying more for the plan than they save with the low deductible.

Maas said that 407 out of 414 people insured by the county spent less than $3,000 on their care last year, and 347 used less than $1,500.

Literally 2% of those covered are driving the county’s rates, Maas said. Supervisors need to inform people that they’ll be ahead if they use the high deductible plan.

Mass suggested the county drop the $750/HMO plan and offer the high-deductible plan instead.

“I don’t know anybody in the State of Iowa that has a $750 deductible plan. It’s just archaic,” said Maas.

Only 11 people are on the $750 plan, said Degen.

The county could still cover 100% of the premiums for employees, said Maas.

“Everybody knows that health care is quite a big bulk of our business,” Degen said.

“We pay for 89.2% of everybody’s dollars as far as. anything … health insurance wise,” said Maas. Employees pay 10.8%. That’s a perk of working for Iowa County, said Maas. “We want to keep it a perk.”

If Supervisors decide to change plans, they need to do so before June for withholding purposes, said County Auditor Brandy Enochson.

North Risk also suggested the county choose a different dental plan, said Maas.

“We have the richest plan offered in the state, … but they’re still making money on us,” Maas said. The County pays more to Wellmark than the company pays out in claims.

Last year the county paid $118,000 in premium and had $99,000 in dental claims, said Maas.

“So [North Risk is] telling us that we should go to self funding,” said Maas. The county would save money and could add coverage of orthodontics, which employees have requested, she said.

If the county were self-funded for dental costs, employees would not see any change, said Degen. The employee would go to the dentist, the bill would be presented to Blue Dental and Blue Dental would charge the county every month.

It would be a gamble for the county.

The family premium would increase about $21, said Degen, but the coverage would include orthodontics.

“I think it would be an option a lot of people would like,” said Heitshusen.