BALLSTON SPA – The Village Board approved the 2018 health insurance policy renewal Monday at a cost of $536,382.82, an increase of $50,296 or 10.35 percent over the current year’s rate.
Mayor John Romano explained that the rates for the plan provided by MVP Healthcare to most employees and retirees would increase next year.
“The cost for health insurance, obviously like everything else, is going up every year. It’s just part of the cost of doing business. Over the last, probably 8 to 10 years, health insurance companies have been raising their rates to meet the rising costs,” Romano said.
The plan currently offered by the village does not include any deductibles or coinsurance. According to village’s health insurance agent, Richard Schultz of Financial Resources Company, the plan would still be less expensive than comparable plans if renewed at the increased rate of $536,382.
Romano reviewed for the board rates for other plans that Schultz had analyzed in preparing his recommendation, noting that the least expensive alternative came from Capital District Physicians’ Health Plan at an increase of $70,616 or nearly 15 percent over the current year’s healthcare cost and would add a $500 annual out of pocket maximum expense for individuals.
“Even the plans with deductibles that closely resemble our plan are even higher than what we’re paying right now,” Romano said.
“It has been the goal of the village to not increase the out of pocket cost to anybody if they can possibly have it,” Schultz said. “It’s by far the lowest cost of all carriers in our area of plans that don’t have deductibles or coinsurance.”
The village has made a priority of minimizing out of pocket costs for employees, establishing a self-funding reimbursement program to return a percentage of employees’ health insurance co-pays.
“We take a certain percentage of certain co-pays like for drugs or physician co-pays and we reimburse it. By having these higher co-pays and doing our own reimbursement in house we’ve been able to keep our increases at a really reasonable, affordable rate,” Romano explained.
Village Board member Noah Shaw asked what caused the large increase in cost compared to previous years. The cost of health insurance for 2017 increased by $9,949 or 2 percent over 2016.
“Just utilization. That was probably the most popular plan at MVP. The more people that get into it, the more claims there are going to be,” Schultz said. “There is no other plan in the capital district that does not have deductibles and coinsurance attached to it.”
“Over the years we have had to move your plans to different carriers and different plans with very similar coverage to that end, to keep your costs at a reasonable level. The increases over the last 10 to 12 years have averaged double digits every year,” Schultz added. “In my professional opinion this is the best plan out there as far as benefits and cost.”
The Village Board voted unanimously to approve the renewal of the MVP Healthcare plan, as well as the Empire Blue Cross Blue Shield vision insurance at an annual cost of $5,538.
Before voting, Shaw began looking ahead to the gap that the increased health insurance cost will create in the 2018-19 village budget.
“Maybe not a question for tonight, but this certainly does raise the question about how we fill the hole. It turns out there isn’t $50,000 worth of cushion in the budget, so I guess it will be a topic of conversation come budget time,” Shaw said.
“Our costs continually go up and our revenues don’t even come close to matching the increases that we have every year, but you’re right,” Romano said.