About 650,000 teachers, state employees and government retirees got some good news Thursday: average insurance premiums for most of their health care plans will drop or remain stable in 2016.
Department of Community Health Commissioner Clyde Reese said the $3 billion State Health Benefit Plan had a good year financially so the state can afford to reduce premiums for many teachers and state employees.
The state also got a big financial boost when Gov. Nathan Deal and state lawmakers shifted about $100 million in costs to local school districts for coverage of school bus drivers and cafeteria workers.
On average, premiums will remain the same or decrease up to $21.36 per month, depending on the plan and who is covered. Premiums will increase slightly for one high-deductible plan. The insurance providers and benefits will largely remain the same.
“We are going to focus on continuity and stability in 2016,” Reese told the DCH board Thursday.
That’s good news for a group of employees and retirees who have been hoping to see both premium and coverage stability the past few years.
“It is encouraging to see the Department of Community Health recognize the high cost of insurance placed on State Health Benefit Plan members,” said John Palmer, a Cobb County school band director and spokesman for the teacher, employee and retiree activist group TRAGIC. “We at TRAGIC see the lowered monthly premiums for 2016 as a first step toward more affordable insurance options for Georgia’s teachers and state employees, as well as an acknowledgement that insurance prices were too high for some plans the past two years.”
A recent state-sponsored report found that Georgia teachers, state employees and retirees were paying more for their health care than workers covered by similar government-subsidized programs in Georgia and nearby states.
Teachers and employees have complained for years that the state raided their plan’s reserves during the Great Recession to pay bills, then jacked up premium costs and cut benefits.
The issue came to a head in early 2014, after the state decided to have just one company — Blue Cross and Blue Shield of Georgia — provide coverage. At the same time, the DCH increased out-of-pocket costs to employees and retirees.
TRAGIC was formed and the group's protests helped persuade Deal and lawmakers to add money to the plan to eliminate many of the increases in out-of-pocket costs. Last summer, the DCH also added more companies and plans to the insurance offerings.
Earlier this year, state officials forced local school districts to pay more to insure part-time bus drivers and cafeteria workers.
Reese said the state is able to keep premiums down for 2016 because claims expenses — payouts for medical costs — were better than expected.
Robert Bunch, the regional vice president for Blue Cross and Blue Shield, said he felt “really good” about the announcement. He said what’s happening with the state plan is in some ways running counter to what is happening in health care in some other parts of the country.
“The cost increases have slowed some, but this year it’s starting to pick up (nationally),” he said.
The recent state study listed several ways to cut costs for employees on the State Health Benefit Plan, including some that the DCH has tried or talked about. They included providing wellness incentives — which the benefit plan does — using telemedicine more, creating on-site health clinics and moving thousands of retirees off the plan and onto another program.
Another possibility, the study said, is an option Deal and lawmakers would probably rather not consider: putting more money into the plan so employees don’t have to pay so much.
Reese said his department will consider making some of those changes — such as increasing the use of telemedicine — in 2017 to reduce costs.
The study — done by Aon Hewitt — also looked at coverage for noncertified school employees, such as secretaries, bookkeepers and bus drivers. It found that the “employer contributions” — payments by the state or local school districts — are insufficient to fund the coverage.
State budget officials have long said that teachers, state employees and retirees are subsidizing coverage for noncertified employees by paying higher premiums.
Some TRAGIC members worry that Deal and lawmakers will force school districts to cover the full tab for health insurance for thousands of noncertified employees. That would cost school districts tens of millions, if not hundreds of millions, of dollars a year more for health coverage.
“We remain concerned about the state passing along higher insurance costs for school secretaries to school districts already struggling with inadequate funding,” Palmer said. “Our school secretaries are integral parts of our education system and deserve quality, affordable insurance options.”
Aon Hewitt suggested two ways to bring down costs for the noncertified employees: force them to pay much more for their coverage or design a new plan with fewer health benefits.
“That is not to say that is where we are going to go,” Reese said, “but I wanted to see what that looked like.”
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