Madison County reviews options to limit employee health-insurance renewal hike

Madison County commissioners and staff reviewed health insurance renewal options after carriers initially proposed a 16% increase, with consultants saying they negotiated that down to about 6% across plans.

The county’s benefits consultant told the commission that the carrier’s original 16% renewal would have brought the county’s plans closer to a 74% loss ratio and said the negotiated 6% would lower the county’s exposure. The consultant said the firm prepared two options for the board to consider: a plan-rated approach that applies different changes depending on enrollment in each plan, and a flat 6% increase across all three plan tiers. “We negotiated that down to about 6% across the board,” the consultant said.

Those two options matter because one of the county’s plans — the “local plus” plan — was described by the consultant as currently running roughly an 88% loss ratio, which the consultant characterized as an 11% cost reduction versus current claims. Under the plan-rated option, if enrollment shifts toward the local-plus plan (which has narrower out-of-network benefits but stronger in-network rates), the county’s overall cost could fall; conversely, if enrollment shifts away from that plan, total costs could exceed the flat 6% scenario.

The consultant gave a high-level estimate that moving from a 16% increase to a negotiated 6% would save about $230,000 compared with the initial 16% proposal, based on current enrollment. The consultant also said the flat-6% option leaves no enrollment risk to the county: “There’s 0 risk in option 2 of anything. You know what you’re getting. It’s gonna be a 6% increase across the board.”

County staff and several attendees asked how the local-plus plan’s network affects members’ access and out-of-pocket costs. The consultant said the local-plus plan is in-network only and benefits members whose providers participate in that network; if more members use in-network providers, negotiated rates can reduce claims and place downward pressure on future renewals. The consultant added that true emergencies are treated as in-network for the purposes of coverage determinations, but acknowledged there can be gray areas when claims are retrospectively reviewed.

Commissioners and staff also asked about employees who are Medicare-eligible. The consultant said group rates apply to all active employees and the county cannot create a separate, lower group tier strictly for Medicare-eligible active employees; however, if employees obtain Medicare and use the county plan as secondary coverage, actual claims paid by the county plan could fall and that may affect next year’s renewal.

Staff said dental and vision renewals with UnitedHealthcare were negotiated as a flat 6% across the board. The consultant and staff said they are working with the county to explore wellness programs (including medication- and program-based weight-loss interventions) and other long-term strategies — including alternate funding arrangements such as partial self-insurance — to reduce future claim growth.

Staff committed to provide enrollment-specific cost tables for the other two plans and to give employees tools during open enrollment to check whether their primary care provider is in-network. The consultant said plan-by-plan detail was included in the slides presented to the commission and that benefits staff would follow up individually with employees during enrollment.