The cost of health hits home

The great health care debate is also part of the annual budgeting for local municipalities, as they continue to deal with the rising costs in providing health options to employees.
Alex Doty
Oct 29, 2012

 

Grand Haven city officials say they've done what they can to keep costs under control.

“The city’s decades-long efforts in its self-insurance fund have regularly kept the city’s costs far lower than what the public premium market would allow,” Grand Haven Finance Director James Bonamy said. “The city pays directly for health services rendered, not health insurance premiums.”

Bonamy said sometimes there are great swings in the direct costs for health services from one year to the next.

“Overall, the city consistently pays 10 percent less than the premium basis would require,” he said.

The city spent an average of about $2.8 million on employee health care in the past five years.

“National increases of 8-10 percent per year are unsustainable and of concern,” he said. “However, the city has done very well against the national averages and will continue to do so.”

Other area municipalities are also attempting to manage the costs of health care.

During the budget-making process for 2013, Grand Haven Township officials looked at various health plan offerings. Township Human Resources Director Suzanne Proska said township employees' insurance premiums are expected to jump 24.5 percent for 2013.

Township Manager Bill Cargo said the original estimate for next year was an 18 percent hike. The larger increase is partially attributable to the Patient Protection and Affordable Care Act, he said.

To deal with these changes, and to stay within compliance of Public Act 152, the township decided to make changes to its insurance plan this year.

Public Act 152 requires public employers, including school districts, to share the cost of health care with employees. Public employers are presented with a choice of passing costs in excess of hard dollar caps onto employees, or passing 20 percent of costs onto employees.

This coming year, Grand Haven Township plans to spend about $250,000 on health insurance. The township’s Public Act 152 cap was $254,620. The estimated costs for 2013, before going with a new plan, was $269,995.

“The township will be increasing the cost of insurance by less than half of a percent,” Cargo said. “That is less than the rate of inflation.”

To read more of this story, see today’s print or e-edition of the Grand Haven Tribune.

 

 

 

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