Madison Looks to Reduce Health Insurance Costs
Health insurance is never an easy line item in the budget, particularly if you, like the Town of Madison, are self-insured. With healthcare costs regularly on an upward trajectory, town officials are working to stabilize, and maybe even lower, healthcare costs in town.
The town is insured through Anthem Blue Cross Blue Shield. While First Selectman Tom Banisch said the town has always had a good healthcare plan—not the Cadillac plan offered to state employees, but good—by July 1 the town is looking to shift the plan a bit, raising the percentage of what employees pay on their premiums.
The reason for the shift has to do with being self-insured. Being self-insured means the town has to put up a significant portion of the claims money, which means increased claims lead to an increase in health insurance costs. By pushing a bit more of the premium burden onto employees, Banisch said the town hopes to reduce those costs.
“It is a simple thing by making people think twice,” he said. “If you are getting great benefits, you don’t really care, you don’t have any responsibility, so you don’t worry about it. So what we are trying to do is we are trying to change the focus a little bit so people understand there is a way that they can participate in their own wellbeing, which will result in savings to the plan.”
While the changes to the health care plan are not yet formalized, Director of Human Resources Debra Milardo said the new plan includes changes in the co-payments for office visits, hospitalization co-payments, outpatient co-payments, and a new structure for prescription co-payments.
“By making the plan design changes alone along with increasing the premium employee costs, the annual cost for this group is now flat,” she said.
While under the proposed plan employees will pay more for office visits and prescriptions, they will also have the ability to control their premiums by engaging in preventative care and healthy lifestyle activities, according to Milardo.
These new activities are being sponsored through the town in partnership with Anthem in the form of wellness initiatives. The initiatives, which began over the summer, have included a fitness challenge, a stress-management initiative, and a weight loss challenge as well as a series of speakers focusing on yoga and nutrition. The idea is to be proactive—if employees improve their health, it might reduce claims down the line.
“It is the kind of stuff where you don’t have to change your entire life, but you find out that it is really simple to avoid problems for yourself,” said Banisch. “That is what it is all about—how can we let people do this easily and we all benefit.”
While the rewards for participating in this initiative are not yet set, Milardo said the town is currently working with Anthem to determine how the incentive-based portion of the managed health plans will run
“We are giving our employees an option to participate in healthy lifestyles and preventative care measures and in doing so, enjoy reduced premium costs and incentives, while still offering a traditional health care plan,” she said. “Employees are free to not participate in the programs we will have available, however their premium will then be higher from their counterparts who do buy into the program.”
Banisch said the town isn’t looking to penalize town employees by shifting the premium burden, but after last year’s negative experience and subsequent 13.2 percent combined school and town healthcare increase, the town needs to be careful.
“The problem with health insurance is even if you did great, year-to-year there is going to be an increase if you keep the plan the same,” he said. “This is in response to rising health care costs and trying to take the bull by the horns and see what we can do to hold costs down and make people healthier.”