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home : news : news Saturday, June 25, 2016

2/2/2013 Email this articlePrint this article 
Clinton County Board of Supervisors brace for health law impacts
The Clinton County Board of Supervisors is making plans to deal with cost increases resulting from the Affordable Care Act, president Barrack Obama's signature health care law, also known as Obamacare.

"You'll have a couple new taxes staring you in the face July 1," Ruth Lee, the county's health plan consultant told the board Jan. 28

Lee's comments came as the board reviewed data on the county's employee health benefit plan as part of preparations for the fiscal year 2014 budget. The fiscal year begins July 1.

A tax of "$1 per belly button covered in the plan" will take effect in July, Lee said, and will increase to $2 per person the following year.

Money raised by the fee will be allocated to a federal committee researching outcomes to identify which treatments provide the best results for chronic conditions, such as cancer and heart disease, Lee said.

"They're going to have a lot of money. I hope there are good results," Lee said, adding she hopes the committee produces recommendations rather than mandates on the health care industry.

In addition, a tax of $63 "per belly button, per year" is taking effect.

Revenues will fund an insurance pool for the high-risk, uninsured population.

"It's a way to fund some of the promises of the Affordable Care legislation," Lee said.

Lee estimated the taxes will cost approximately $32,000 per year based on 225 employees with an average of 2.3 people covered under the health plan for each employee.

The cost breaks down to about $13 per employee, per month.

The fee for the high-risk insurance pool is scheduled to decrease by a third in subsequent years and eventually disappear altogether, but Lee said she's not confident the phase-out will happen.

Lee was unsure if the $63 fee takes effect in July of this year or in January 2014.

She said she thinks the money will be needed to cover other costs resulting from the health care law.

Lee said there are two aspects of the law people in the health care industry agree on regardless of their political persuasion.

One is, "If you like your health plan, you can keep it, but it won't be the same."

The second point of agreement, Lee said, is represented by the phrase "the high cost of affordable health care."

Auditor Eric Van Lancker said Lee's partner at RJ Lee Health Consultants shared useful information at a recent presentation on impacts of the Affordable Care Act related to part-time employees.

Van Lancker said he learned the cutoff for classifying an employee as full-time is based on 130 work hours per month, rather than 30 hours per week. The health care law requires employers to provide health insurance for all full-time employees.

He said the insurance requirement won't apply to temporary, part-time employees like the county's seasonal workers.

Individuals who work for four months or less can work any number of hours without falling under the insurance requirement, Van Lancker said.

In response to a question, Lee said the health care legislation has no provision to tax the value of an employee's health benefit package but does require the value to be listed on employee W-2 forms.

"I'm skeptical. They say it's just for awareness, but it could happen, though it would be politically difficult," she said.

"We'll see what survives. There are some congressional battles coming," Lee said.

Plan experience report

The county's self-funded health plan is $6,700 toward the positive so far after a $54,000 gain in the first quarter and a $47,000 loss in the second quarter, Lee reported.

That puts the plan at "virtually break even" six months through the year, she said.

The health fund has a $3.8 million balance, Lee noted.

The plan's loss ratio currently is 82 percent of the maximum claims liability, but Lee said the county tends toward heavier usage in the first half of the year, so she expects the ratio to drop.

Last year the county ended with a 70 percent loss ratio despite having an 86 percent ratio halfway through the year.

Claims in January and February will have a big impact on the cost of renewing the health plan, she said.

"An 82 percent loss ratio is not horrible. It's a little bit above where we like to see, at 80 percent," she stated.

Lee said she expects to have a final renewal cost in early March. The board of supervisors has directed elected officials and department heads to base budget proposals on an estimated 5 percent increase in health insurance costs.

The plan cost increased 1.6 percent last year, according to supervisor Brian Schmidt, to $1,281.25 per month for a family plan and $487.30 for a single plan.

Costs for prescription drugs have fallen from an average of $73.52 to $66.77 per prescription since the county switched to a new prescription drug program last year, Lee said, and the county is meeting or exceeding benchmarks of the Med Trak prescription plan.

She recommended the county adopt two changes to manage costs - a "step therapy" program that encourages greater use of generic drugs over brand names and using specialty pharmacies with more competitive pricing to provide certain prescriptions, such as arthritis medications and self-injectable drugs.

Lee said a switch to step therapy could save $46,000 annually if all health plan members participate.

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