Columbus Council Budget Review Chairman Skip Henderson doesn’t want council to make the same mistake it made last year, one that allowed a multi-million dollar health care deficit in fiscal 2014.
Last year, the administration warned that the city was facing a $2 million health care deficit if it was left unaddressed. Mayor Teresa Tomlinson and Finance Director Pam Hodge presented a change in the plan that would have increased employee premiums and raised deductibles and co-pays. It was a plan they said would greatly reduce the deficit if enacted immediately, in September, when it was first presented.
But council delayed making a decision until February, which delayed implementing the changes until they would not have any real effect on the fiscal 2014 deficit.
Council is facing a similar, if even more pressing, situation during this year’s budget review season. This year, if no changes are made, Tomlinson and Hodge say the city could face a $4.5 million health care deficit in fiscal 2015.
Following a presentation of the administration’s proposal Tuesday morning, Henderson harkened back to last year’s lengthy deliberations.
“We don’t want to drag it out, because we’ve seen how the problem compounds,” Henderson said. “We’re already millions in the hole in our health care fund now. We could have cut that in half if we had taken the action we took this year last year when we first started talking about it.”
Hodge presented the proposal Tuesday, which is part of the fiscal 2015 proposed budget of $263 million. To eliminate the $4.5 million health care deficit, the administration proposes:
Eliminating spousal coverage if the spouse has access to health insurance at his or her job, which is common in the private sector.
Basing the city’s contribution to premiums on 70 percent of the cost of its Health and Wellness Center program’s premiums, which are lower than either the HMO or PPO options. This would raise premium costs to employees who opt for the HMO or PPO plans. The mayor’s proposal would also raise out-of-pocket maximum payments, deductibles and prescription co-pays.
Those steps, along with a few others, would produce just over $4.5 million in savings, in effect balancing the health care budget, Hodge said.
Councilors Judy Thomas and Glenn Davis questioned the proposal, Thomas asking for several clarifications and Davis asking that the administration provide council with more options, in addition to the proposal on the table.
Hodge said the employees do have options. She outlined some of the rising HMO and PPO premiums under the plan, which would be greatly mitigated if employees opt for the Health and Wellness Center plan, which utilizes the city’s new medical clinic.
“So there still is an option, particularly for employees on the HMO and PPO plans,” Hodge said. “If you decide to move to the Health and Wellness Center plan, your cost would either go down or be basically the same (as they are currently).”
After the budget review session, Henderson said he understands the frustrations city employees feel with rising health care costs.
“I get it, but at the end of the day, the objective is to provide as high a quality health care plan as we can within our means. Otherwise, it has an impact on the employee base anyway,” Henderson said. “I would hope that the employees would seek information for the best way to approach the plans for their families.”
Henderson said the consequences of not addressing rising health care costs promptly are starkly obvious.
“The consequences are we’re going to run out of money. If we run out of money, then we start impacting the number of employees, we start downsizing and eliminating services,” he said. “We’re not there yet, and I think that as long as we continue to be careful about where were heading, we won’t get there.”