Municipal budgets take health-care hit in 2013
Local governments—perhaps like many Americans and business owners—are eyeing their budgets for 2013 and projecting they’ll be paying more in health care costs, some by quite a lot.
An analysis of the preliminary budgets proposed for Mesa County, as well as the cities of Fruita, Grand Junction and Palisade, shows that each is anticipating rising costs for next year and adjusting plans and premiums accordingly.
Mesa County counted 965 employees in 2012, many of whom are enrolled in the health insurance program and have access to a clinic operated just for them. While the increases between 2011 and 2012 were minimal, and absorbed by the county, plan premiums are set to rise from $908 to $949 each month for next year. Employees will kick in $10 more every month as part of their share.
Though the data for 2012 are still coming in, and budget numbers are preliminary, the county is anticipating $6.1 million for medical and health insurance costs next year—about $550,000 more than this year.
“Are we continuing to see cost increases? Yes. Are we being creative to manage those? Absolutely,” said county spokeswoman Jessica Peterson, referring to the county’s self-insured model and the opening of the employee care clinic.
The city of Grand Junction also has a large pool of employees—nearly 600 in its health plan. And while they’ll have the same plan and deductible as this year, both their contribution and the city’s portion are set to rise 10 percent.
The 10 percent jump is reflected in the city’s proposed 2013 budget, which anticipates spending an additional $572,000 across all the city’s funds and departments next year on health care, according to city spokeswoman Sam Rainguet.
The area’s municipalities are not unique.
According to the nonprofit Colorado Municipal League, whose organization represents 99 percent of the municipal population in the state, increased employee health care costs are among the top two budget challenges they face, with the first being unfunded street maintenance.
CML says 58 percent of its members will see an increase in health care-related costs for 2012, with an average increase of 9 percent.
Fruita’s taken a longer-term approach to the rise in the costs of health care and insurance. Three years ago, the city set up a plan with its provider, Rocky Mountain Health Plans, to stabilize costs, which were seen as inevitably rising.
City Manager Clint Kinney said back then the city made one large cut to its plan and kept the same benefits program in place for the three years.
Now rates are up, as is the city’s deal with Rocky Mountain Health Plans. So the two recently reached another three-year agreement to keep costs flat, but with reduced coverage plans.
“If we would have stayed with our same program, we were looking at like an 11 percent increase in our rates,” Kinney said.
In practical terms, Fruita employees will see deductibles jump to $2,000, from $1,500 this year. The city picks up $500 of that, and will continue to do so, but the implications of having “less rich” benefits plans goes beyond day-to-day economics — especially in Fruita, where Kinney says the city leans on benefits packages to attract talented employees.
“While our pay may not be the best, when you look at total compensation, we make sure that we’re trying to be competitive,” he said. “We know that our health coverage is one of the things where we compete well.”