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Sullivan employees may face insurance premium hikes of at least 15 percent

June 2nd, 2007 12:00 am by J. H. Osborne

BLOUNTVILLE - In January, Sullivan County and its employees could be looking at a 15 percent increase in health insurance premiums - or more - if current provider CIGNA's loss ratio doesn't go down beforehand.

A report provided to county officials in late May detailed premiums and paid claims between July 1, 2006, and the end of April. It showed CIGNA left with an average loss ratio of about 109 percent for the period.

That was better than it had been for two months running, however: the loss ratio was more than 145 percent for claims paid in the month of March, and nearly 153 percent for claims paid in the month of February.

In April the loss ratio dropped to about 99 percent.

The county's contract with CIGNA continues through December. Employee health insurance used to be contracted to coincide with the county's fiscal year, from July 1 through June 30. But that caused problems for some employees when it came to tracking deductibles which accumulated on a calendar year basis. The county entered an 18-month contract with CIGNA beginning in July 2006 and plans to contract on a calendar year basis beginning in January.

Sullivan County Commissioner Sam Jones is chairman of the county commission's insurance committee.

Jones said the committee already has asked an insurance broker to begin soliciting price quotes from all interested insurance companies. He said the goal is to get those quotes back by August or September at the very latest - to give plenty of time for a transition if there is a switch in providers.

Jones said the committee has been told to expect a 15 percent increase, or more, if claims continue to outpace premiums at the current rate.

The committee is going to step up efforts to encourage employee participation in wellness programs offered by CIGNA and to develop incentives to keep employees motivated.

According to information presented to the committee last month:

• 18 members of the county employee insurance plan each had claims in excess of $25,000 - ranging from about $26,000 to more than $70,000 - for a total of nearly $719,000, or about 16 percent of all claims paid.

• The number of county employees participating in the plan grew from 675 in July 2006 to 734 in April - with 1,708 total members, including their spouses and dependents.

• For the eight months of July-April, premiums paid totaled about $4.11 million - and total claims paid exceeded $4.47 million: nearly $3.3 million for medical claims and more than $1.17 million for pharmacy claims.

Additional information, tracking claims for the period of July-March included:

• On average 1,606 members (employees plus their spouses and/or dependents) were covered by the plan between July and the end of March. In age, the largest subgroup of members were under age 18: 400 were between 1 year old and 17 years old.

• A little more than 39 percent of the amount paid in claims was for employees, 37 percent was for spouses, and about 24 percent was for dependents.

• Most employees (80 percent) enrolled in the base level of coverage, called the "silver" plan. The county pays about 89 percent of the premium for that coverage - and pays the same dollar amount toward premiums for employees who enroll in the "platinum" plan (about 17 percent) or "gold" plan (about 3 percent). Employees who opt for the more expensive levels of coverage pay the difference in premium costs.

• Of payments to physicians, those specializing in "family practice" accounted for the largest chunk of claims paid at nearly 41 percent, followed by "pediatrics" at about 17 percent and "internal medicine" at more than 16 percent.

• The highest percentage of payments by age was for the 40 to 49 group (with 311 members), at 23.1 percent of total claims paid.

• The highest average payment per member rate was $5,215 in the over 65 years old group.

• In both the "average overall payment per member" and "average overall payment per employee," members of Sullivan County's plan were below the "norm" for the period compared to other groups.

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