Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, October 26, 1994 TAG: 9410260039
SECTION: VIRGINIA PAGE: C-5 EDITION: METRO
SOURCE: DAN CASEY STAFF WRITER
DATELINE: LENGTH: Medium
For perhaps the first time ever, workers' cost for health insurance actually will be going down, thanks in part to a healthier work force. At the same time, benefits have been expanded to cover prescription drugs, routine physicals, breast cancer screenings for women over 34 and prostate exams for men.
The new contract with Trigon (formerly Blue Cross/Blue Shield) begins Jan. 1 and was approved Monday by City Council. Under it, employees will see their share of premiums drop 5.3 percent.
Taxpayers will save, too, because the city is self-insured, with Trigon administering the benefits program. On average, 77 percent of workers' health premiums are paid out of tax revenues. Total claims for the year ending July 31 amounted to $4.2 million.
Workers who purchase family coverage through the city will see the biggest difference in their paychecks. Their monthly premium will drop from $295.62 to $280.18, a saving of $15.44.
By contrast, workers' health insurance premiums jumped 19 percent for 1992 and 28.4 percent for 1993, although there was no increase this year, City Manager Bob Herbert told council.
"It's unusual," said Barry Agnew, an administrator in the personnel management office. "The rates did go up plenty high before. I can't figure any time that it's gone down before."
Herbert called the drop in costs a result of "the convergence of the stars."
Major catastrophic illnesses among city employees, which pushed premiums higher for 1992 and 1993, haven't happened with the same frequency this year. That is partly the result of illness prevention programs the city has instituted encouraging workers to quit smoking, eat healthier food and visit doctors more frequently for regular checkups.
The rate increase in 1993 also was more than enough to cover claims.
But the biggest factor is a drop in the rate at which medical costs have been increasing in recent years, Herbert said. The "trend factor," an inflation rate that insurance companies use to forecast health costs in the future, dropped from 17 percent this year to 10 percent for next year.
The cost to workers would have gone down a little bit more next year if the city hadn't expanded its insurance coverage. Leaving the benefits as they are now would have resulted in a $278.48 premium for workers with family coverage, an additional $1.70-a-month saving.
Not all local governments are seeing rate cuts. Roanoke County employees who renewed their health coverage in July saw their premiums increase by between 9 percent and 22 percent, depending on whether they chose family or employee-only plans.
But because the county picks up a greater proportion of the cost, county workers pay $175.02 per month for family coverage, $105 less than city workers, said Kathy Claytor, the county's assistant director of human resources. Although the county also is self-insured through Trigon, it's difficult to compare the plans because there are significant differences, she said.
Vanessa Scherzer, a Trigon spokeswoman, said cost controls in the health insurance industry as a whole are limiting medical cost increases. For instance, fully insured groups underwritten by Trigon are seeing average premium cuts of 2.8 percent this year, she said.
There also is a tremendous demand among health insurance buyers for lower rates, she said.
by CNB