Most of the comments about the coming shift in the Henderson government’s health insurance have been negative, based on the planned increase in the deductible from $500 to $1,000. We don’t want to spend much more time on this — insurance is not our area of expertise, and, like most Hendersonians, we aren’t directly affected by the change in benefits — but we think the City Council deserves credit, not criticism.
Believe us, we’re happy to take shots at the council when the time is right, but this isn’t that time.
Health insurance is a nightmare for any employer these days, but the council took the action that should minimize the pain of rapidly rising costs — the same phenomenon that is causing the Medicaid program to explode.
Let’s break the change down by its impact.
First, if you have any of the dependent coverages offered under the city’s health plan — children, spouse or family — you will pay less in premiums in 2005-06 than you did this year. Granted, the increase in the deductible will eat up much or all of that savings if you have enough claims. But if the city had stuck with Blue Cross and Blue Shield and kept the $500 deductible, you would have spent more on deductibles and premiums than you will now.
In short, the council’s decision to switch to the North Carolina League of Municipalities’ $1,000-deductible policy should leave you more money in your pocket on June 30, 2006, than would have been there if the council had changed nothing. And we won’t even get into the devastating effect if the city had meekly accepted Blue Cross’ initial request for a 21 percent premium increase and had not bid out the policy.
The new policy also should make it feasible for more than 39 city employees to enroll in some form of dependent coverage, which is a good thing.
But if you have and intend to keep individual insurance, the price of the monthly premiums is irrelevant to you. The city pays the full cost, so it could quadruple without hitting you in the wallet. What you want is the lowest deductible possible, and you didn‘t get it.
Potentially, you could pay $500 more over the course of the year. But if you’re among the biggest group of city employees, you won’t spend even $500 during the year — meaning that in reality, the change will cost you nothing.
If, on the other hand, you have a major illness or injury and rack up thousands of dollars in medical bills, the amount you’re saving by having insurance should make it easy to forget the extra $500 you have to pay. That’s a point made repeatedly by Mayor Clem Seifert, who, it’s worth noting, is facing the same deductible increase as city employees because he is part of the city’s insurance group. He also has the experience with the health care system to put $500 in perspective.
There will be people caught in the middle. They’ll spend more than $500 on deductibles but either won’t reach $1,000 or will save so little once they do that the insurance hardly seems worthwhile. These city employees will pay more, and there’s no reason for them to like it.
There’s no way to know how many people will fall into this unfortunate group, but the city’s claims history indicates it won’t be many — perhaps two dozen. Even if 50 employees pay more, roughly 80 percent of city workers would wind up spending the same amount or less than they would have with the old Blue Cross plan.
Those are pretty good odds for city employees, and it was a gamble the City Council was right to take — especially if the some of the money the city saves winds up in employees’ pockets through raises or bonuses.