Think long term on insurance decision
Members of the Medford School Board need to keep an eye on the future when they are making a choice between staying with Security Health Plan (SHP) or switching to a less expensive plan offered by Aspirus Arise.
As in the past, there is real money on the table. There is about a $500,000 difference between sticking with the SHP policy the district has now and switching to a narrow network plan through Aspirus. The district spends about $4.5 million in insurance premiums each year, compared to about $35 million in total spending across all areas.
SHP had initially proposed an insurance increase of 12.4%, which would cost the district $651,365 in additional premiums. Spectrum Benefits Solutions, the districtâ€™s insurance brokers, were able to negotiate SHP to a 10% renewal rate for the current plan bringing the projected increase to $507,913.
SHP also offered the district nine different plan options adjusting coinsurance, prescriptions and deductibles to present different costs. The SHP option that is most viable at this point would see employee deductibles increased for the first time since 2013 with the net result of having a $301,855 increase, or about 5.94% over what was paid last year.
The most viable Aspirus option being considered by the board has a $25,564 premium increase, about 0.5% over what was paid last year. The catch for the Aspirus option is that it is a narrow network plan which would force employees to go through the Aspirus network of providers and affiliate providers.
Considering that about two-thirds of all the health insurance claims in the district are being paid out to Aspirus providers and their partners, switching to a narrow network plan would not be significantly disruptive to the majority of district employees. This is also not surprising given the close proximity of the Aspirus Medford Hospital and Clinicâ€™s campus to the school facilities. That said, there will be an outcry, as there has been in the past, from some district employees who have long-term relationships with providers at Marshfield Clinic and elsewhere who will not want to make changes to their providers.
The unfortunate reality is that the majority of area taxpayers donâ€™t have the luxury of a broad network. If they do, they must bear the brunt of the additional premium expense out of their own pockets rather than from their employers. The district should look closely at providing an affordable buy-up option to address the needs of these employees.
While it is always important for elected officials to be good stewards of taxpayer resources, board members need to be especially cognizant of the impact of leaving $300,000 on the table when school districts are facing significant uncertainty with the ongoing impacts of the COVID-19 pandemic. There are also concerns the state government will renege on its funding commitments due to projected tax revenue shortfalls. Having money available will give the district additional flexibility in meeting the educational needs of students in the coming year.
Board members must think beyond the school buildings as they make health insurance choices.