Health care premiums up a bit for most state employees

Posted by BRAD SHANNON on July 19, 2013 

— Health care premiums are going up on average by about 1.8 percent for Washington public employees next year, which represents a small cost to most state employees, whose pay, in effect, went up July 1 with the end of a temporary 3 percent pay cut.

Lou McDermott, director of the Public Employees Benefits Board programs, said there are multiple factors that helped to limit the rise of premiums and to avoid new out-of-pocket costs for about 343,500 covered state employees and retirees.

“There is an overall decrease in utilization and in cost,” McDermott said Friday, suggesting one factor is that employees appear to be opting for fewer elective procedures.

The new health-premium rates were locked in for 2014 by the PEBB on Wednesday in a unanimous 7-0 vote. The board, which includes representatives of government and labor groups, accepted the recommendations outlined one week prior by staff at the Health Care Authority, which manages PEBB programs for both local and state public employees and retirees.

Under the PEBB’s new rate structure, premiums go up for some plans and down for others. For example, a single employee covered in the state’s historically most popular option, Uniform Medical Plan, must pay $2 per month more, or $79, starting Jan. 1. Increases also are in store for those who cover a spouse or family.

Uniform is the state-run insurance plan, and more than 219,000, or almost two-thirds of those covered by PEBB plans, pick that option.

Similarly, premiums rise by $2 per month to $117 for a single employee enrolled in the Group Health Classic plan. But rates drop by $1 to $65 for Group Health Value and drop to $21 per month from $36 for Group Health’s health-savings-account option, known as a consumer-driven health plan.

The new rates are based on employees paying 15 percent of premium costs and the state paying 85 percent. That share could change in 2015 but depends on what a coalition of 26 unions works out in negotiations with Gov. Jay Inslee’s administration.

Talks over health care benefits broke down with former governor Chris Gregoire, but are expected to resume for 2015 with Inslee this summer. The new governor has talked a lot about wanting to cut health costs by encouraging wellness for state employees.

Sign-ups for 2014 coverage take place Nov. 1-30. The minimal plan changes for 2014 affect state agency employees as well as those workers at universities and community colleges and retirees. Rates differ for public school and local government participants in the plans.

McDermott said that Group Health Cooperative came in with lower bids than expected.

“I was surprised by Group Health’s bid, how well they did. I think it was a testament to many things Group Health is doing to be competitive and lower costs,’’ McDermott said.

The Health Care Authority is still sorting out how to impose two surcharges approved by the Legislature. The two-year operating budget imposes a $25 monthly surcharge for an insured family that covers at least one tobacco user, and that surcharge begins July 1, 2014.

There is a similar $50-per-month surcharge to cover a spouse who has comparable insurance options through a different employer, starting July 1, 2014.

Details are still being worked out on how to figure out who is a tobacco user and how to determine whether a spouse has comparable coverage. The Health Care Authority has indicated it could rely on an employee’s attestation that he or she and covered family members do not use tobacco products.

The Legislature is providing $782 per state employee on average for health care, dental, life and disability insurance coverage next year, which is less than in past years. Rates do not change for life insurance or long-term disability insurance in 2014, and state employees’ dental premiums continue to be picked up by their employer.

Retirees and self-pay participants in the DeltaCare dental program also avoid rate increases in 2014. Those in Uniform Dental will see rate decreases, and those in Willamette Dental plans will see small increases (for instance, rising from $40.20 to $43.23 for single subscribers).

Retirees also are seeing small rate hikes in insurance coverage for most plans. For retirees not yet eligible for Medicare, the rate for a single subscriber in the Uniform Medical Plan goes up $5 to $551 per month.

State government retirees on Medicare also face higher rates under the state system, even after a $150 per month subsidy from state taxpayers. Those on Uniform Medical can expect premiums to rise to $223.87 for single coverage, up from $219.24.

Brad Shannon: 360-753-1688 @bradshannon2

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