Yesterday, I received a call from my daughter asking for some advice about health insurance. My wife warned me to be patient with her because I have a tendency to get cranky when I’m asked to try and explain or resolve complicated issues at home. I like to think I do better at work.
My daughter referred me to the infamous Cover Oregon website, where we looked at a variety of plans before I advised her to choose a plan with a lower monthly premium, higher deductibles, and a relatively high out-of-pocket maximum. My daughter’s husband makes a good income, and her family has not been prone to illnesses or serious injury. The coverage offered by the high deductible plan will protect the family against a major event while allowing them to set money aside for their share of routine medical costs. In the meantime, they won’t be paying a high monthly premium to the insurance company for coverage they generally don’t need.
The City’s management team is looking at a similar plan for the people that work here. We’ve found that most of us (83 percent) do not exceed $3,500 a year in expenses and 57 percent do not even reach $1,000. We are, therefore, paying an extremely high monthly premium that offers benefits most of us do not use. I believe we can save the City a significant amount of money and increase benefits to most employees by moving to a plan more like the one I suggested to my daughter.
This idea is not some radical new scheme invented in Albany, but rather a fairly common practice among cities of our size. If the City is able to reduce our premium payments, we can establish health reimbursement accounts (HRA) for employees; and most will realize a greater benefit than what they currently receive. Whatever plan the City offers, including our current ones, will provide more benefits to some and less to others. The weakness of our current offerings is that they provide the greatest benefits to a pretty small group.
The new proposal will not leave anyone unprotected against a significant medical expense, and it will allow people to bank their savings for future needs. I have heard many employees tell me over the years that the only reason they continued to work in their later years was the need for affordable health insurance. A plan that includes an HRA could solve that problem for many, if not most workers.
Finally, the City’s plan is likely to come up against the so-called “Cadillac limits” imposed by the Affordable Care Act in the near future which could increase out-of-pocket costs for all of us. Moving to a higher deductible plan with an HRA should address that problem while providing a better benefit to most of the 1,000 people covered by our current plan.
We are currently discussing the new health insurance proposal with one bargaining unit and will be offering more information as we move toward agreement on a specific plan. In the meantime, I would encourage everyone to look into health insurance and make some judgments about what would be best for his/her specific circumstances. I do not believe we will have the option of just continuing our present coverage into the indefinite future.