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Court looks to limit rise in TravCo health care costs
With annual cost overruns projected to be more than $7 million this fiscal year, Travis County Commissioners are looking at ways to curb the skyrocketing cost of providing health care for employees and retirees.
According to figures prepared by county staff, health care expenses for the first three months of FY2015 put Travis County on a projected path toward spending more than $64 million over the entire year, with only $57 million in the budget.
Pct. 3 Commissioner Gerald Daugherty brought up the discussion last week, pointing out that costs for the county’s self-funded health insurance program are rising rapidly.
“I’d like for everybody to understand where we are today versus where we were last year at this time,” Daugherty said, quoting from figures for October through December 2014. “Total paid claims to date are $16,152,000. Last year at this time, it was $13,462,000, so we have an increase of $2.6 million just for this particular period. To date, we are over budget to the tune of $1,783,553.”
Daugherty said one of the biggest cost-drivers is the number of claims over $25,000.
“This year, we have 56 of those claims, totaling $3.7 million,” he said. “Last year at this same time, we had only 34, which is right at a $2 million overage from what we had last year.”
Benefits manager John Rabb said a relatively small number of high-dollar claims are responsible for driving up much of the county’s costs.
“We have had an increase in the high-cost claims and an increase in the severity of the high-cost claims, meaning those dollar amounts are getting larger and larger,” he said. “Diabetes and musculoskeletal diseases are top cost-drivers year after year, and it continues to be that way.”
Rabb added that another major cost-driver was the growing number of employees and retirees added to the rolls each year. Travis County has approximately 5,000 employees.
Daugherty said that in the past, Commissioners have rarely paid much attention to health insurance costs, routinely approving each week’s claims payment on the consent agenda. He said at the current rate of cost increases, however, the program is becoming unsustainable.
Travis County is self-insured, which means that although an insurance company, United Healthcare, administers the program, the county pays directly for all claims. According to the county Employee Benefits Guide, there are three health plans offered: an EPO in-network-only plan, a PPO in-and-out of network plan and an EPO in-and-out of network plan. Each plan varies as to the amount of premiums and out-of-pocket costs, similar to plans offered by many large private employers.
Travis County also has an Employee Wellness Program that involves an annual health assessment with referrals for various prevention programs.
Commissioners discussed just how far they could go in identifying employees who are at risk for conditions such as diabetes and high blood pressure that are likely to have high claims. Rabb said there are strict limitations of what the county could do in that area and recommended that they consult the county attorney’s office for guidance.
At the Commissioners’ request, County Judge Sarah Eckhardt said she would add a more detailed discussion of health care costs to the agenda of a future work session.
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Key Players & Topics In This Article
Travis County Commissioners Court: The legislative body for Travis County. It includes representatives from the four Travis County Precincts, as well as the County Judge. The County Judge serves as the chair of the Court.