National insurance crisis hits SMSU

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Southwest Missouri State Universitys employee health insurance fund is expected to be $1.6 million short by years end, according to a report presented to its Board of Governors in October. The university board voted Oct. 22 to reduce employee benefits eliminating dental coverage by next summer and increasing employee deductibles.|ret||ret||tab|

The self-insured employer, which covers about 4,400 individuals, is experiencing a 17.5 percent increase in health care costs through nine months this year. The expected shortfall would force university officials to dip into a $3.5 million reserve fund thats been eroding for some time, said SMSU President John Keiser, PhD. The funds solvency will be threatened next year.|ret||ret||tab|

Since Ive been here, in 10 years, health care costs at SMS have gone up 300 percent, Keiser said, summing up the financial strain placed on the self-insured university.|ret||ret||tab|

Howard Berriman, SMSU assistant director of human resources, cites rising costs of technology, coupled with an aging member population.|ret||ret||tab|

According to Gordon Kinne, CEO of Med-Pay Inc., SMSUs third-party administrator, growing uses of new health care technologies and medications are significant cost-driving factors.|ret||ret||tab|

Were seeing health care costs of services going up 15 (percent) to 20 percent, Kinne said.|ret||ret||tab|

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Not alone|ret||ret||tab|

SMSU is not alone in its fight against rising health care costs. National reports say health care insurance is up 12 percent to 15 percent over last year.|ret||ret||tab|

Everywhere you look, employers are facing the same challenge, Berriman said. How do I provide a high-quality health care plan that I can afford as an employer?|ret||ret||tab|

A common answer is to ask employees to shoulder more of the burden.|ret||ret||tab|

According to a Missouri Chamber of Commerce and Industry survey on employer compensation practices, nearly half of the companies polled increased employee premiums in 2003. Its a growing trend: 32.9 percent of respondents asked their workers to pay more for coverage in 2002 while 27.9 percent raised the employee share in 2001.|ret||ret||tab|

But employers are often left with no choice when faced with rate spikes. Consider a Springfield manufacturers initial renewal that called for a 120 percent increase before the employer was able to work it down to a manageable rate. That was the situation for one member of the Southwest Area Manufacturers Association, said Rita Needham, executive director of SAMA. Needham did not disclose the name of the specific company.|ret||ret||tab|

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Seeking solutions|ret||ret||tab|

Needham said SAMA members have struggled to maintain quality employee health coverage, and some have been forced to downsize their plans, increase deductibles, increase employee premiums and even evaluate if they could continue to provide coverage at all. After hearing members bemoan double-digit health insurance increases for three years straight, Needham set out to find alternatives for her members.|ret||ret||tab|

A partnership with Employee Benefit Design created SAMA Select Care, customized health care products available only to SAMA members. Employee Benefit Design partner Ken Stephens presented the SAMA Select Care options at an Oct. 15 SAMA membership meeting.|ret||ret||tab|

Stephens said any one of the four plan options could save a company up to 50 percent in health care costs.|ret||ret||tab|

We are offering them several different options where they can afford to provide health care for a group as small as two employees, Needham said.|ret||ret||tab|

About six members have inquired about SAMA Select Care, she said.|ret||ret||tab|

The Missouri Chamber of Commerce and Industry is another membership group providing members with options in health care coverage. It recently started the Missouri Chamber Care program, which combines a high-deductible policy with a health reimbursement account, according to a chamber news release. |ret||ret||tab|

Health reimbursement accounts are funded with premium dollars that are saved by purchasing the high-deductible plan.|ret||ret||tab|

The Missouri Chamber reports premium savings for most employers averaging 30 percent to 40 percent, said Daniel Mehan, president/CEO of the chamber. This method is widely recognized as being on the cutting edge of market-driven reform. |ret||ret||tab|

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SMSU case|ret||ret||tab|

SMSU chose not to raise premiums for plan members, but rather to increase cost sharing for those using the program via higher copays and deductibles.|ret||ret||tab|

SMSU health insurance is available to faculty and staff, their families, and retirees. But only those using the family plan pay a monthly premium, Berriman said. |ret||ret||tab|

Of the 2,100 full-time employees in the universitys plan, only 583 have family insurance, according to Berriman.|ret||ret||tab|

The vast majority of employees at SMSU are not impacted by premium increases, he said. And raising health insurance premiums would not have the financial effect needed.|ret||ret||tab|

The approved proposal is expected to generate $350,000 through elimination of dental coverage and increased premiums, plus an additional $750,000 contribution by the university.|ret||ret||tab|

That will mean that the university is putting a total of about $8.3 million into its insurance, Keiser said. Thats a lot, given the fact that we get around $78 million of appropriated money.|ret||ret||tab|

This action is only a first step for the university, Keiser said, considering half of its plan members are above age 50 and will be requiring additional health care.|ret||ret||tab|

Were going to have to take a look at it again in each of the next two years, Keiser said.|ret||ret||tab|

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