Health Service Board to study applying City Plan rate-stabilization deficit to active members after debate

Mike Clark of Aon presented the UnitedHealthcare City Plan utilization and claims experience for calendar year 2018 and recommended amortizing one-third of a projected $351,000 rate-stabilization deficit—$117,000—to 2020 rates across rating tiers. Clark told the Health Service Board the adjustment would raise presented rates by about 0.3 percentage points, roughly translating to about $5 a month per covered life."The deficit will then slightly increase the rates that we present in May," Clark said.

The board’s discussion focused on fairness and who benefits. Commissioner Randy Scott and others pressed whether the amortization should be applied only to active employees, who largely pay premiums, or to early retirees, who often lack other plan choices and pay the full premium. Executive Director Abby Yount said the recommendation follows the board’s existing rate-stabilization policy but acknowledged the board could decide to make a one-time policy exception.

Members raised implementation risks including member migration from City Plan if costs shift disproportionately and the administrative complexity of changing allocation rules mid-cycle. Several commissioners advocated additional analysis showing the distributional effect on active employees versus retirees.

Outcome: the board did not adopt the recommendation on the floor. After discussion the original motion to adopt was withdrawn and the board unanimously approved a motion to return the item for further analysis and a formal action that would consider applying the stabilization amount to active members. Next steps include staff analysis of alternative allocation approaches and a presentation of final rate recommendations in May.