Buena Vista County’s health insurance rates are slated to rise by nearly 16% next year because of increasing claims across the board.
Representatives with Stille, Pierce & Pertzborn told the board of supervisors on Tuesday the county’s claims trend portended a rate increase, the second largest in 12 years. The county’s paid medical claims have increased 37% since 2020; its pharmacy claims have jumped 68% over the same timeframe. For the first time ever, its overall claims have crested over $2 million.
Tony Pertzborn, an owner of SPP, told the supervisors the county’s claims are clustered among a small number of claimants that need either expensive drugs or procedures. Nearly a fifth of the county’s overall claims were incurred by enrollees seeking anywhere from $200,000 to $500,000 in a single claim, according to the county’s insurance provider, Wellmark. And claims for three specialty drugs incurred over half of the county’s pharmaceutical claims.
“Seven people accounted for 38% of all claims,” Pertzborn noted in an hour-long presentation to the supervisors and department heads. Supervisor Paul Merten shook his head as Pertzborn and SPP Account Executive Barb Wetherell described the county’s claim clusters.
Board Chairman Kelly Snyder said after the meeting the rate presentation came as “a bit of a shock, even for health insurance rates.”
“We heard health insurance rates were rising everywhere this year, but I had no idea we would be this bad,” Snyder said. Neighboring Cherokee County is budgeting for a 10% increase in health insurance rates. “These kinds of things make it hard for us to attract employees. Why would you want to work somewhere if all your pay gets eaten up by health insurance?”
Wetherell offered the supervisors an alternative that would actually decrease rates by 4%.
The proposal essentially redefines the county’s health insurance plan with a smaller network of providers. Nearly all providers in Iowa and contiguous neighboring counties are included in the alternative; those outside the state and the contiguous counties are considered out-of-network.
Claims to out-of-network providers are considered costs against the user’s deductible.
Wetherell said the county’s existing plan is “the most inclusive network available,” but the alternative could be a fitting candidate for the county. Wellmark’s analysis found 100% of the county’s claims were lodged with in-network providers this year — the average is around 95%. To Wetherell, that means county employees are already inclined to pursue services that are in-network, which saves money for both the county and Wellmark.
“You’re a great candidate for this plan,” Wetherell told the supervisors. “If you continue to seek services today like you already are, it will have very little impact on 99% of you. Truthfully.”
The supervisors deferred action on the alternative, pending further discussions between SPP and the county’s insurance committee.
Wetherell said the county could implement the alternative in two ways: fully for all employees, or as an offer with the existing plan that’s slated to spike by 16%. Snyder said the implementation method would be the decision of the insurance committee, which could make a recommendation as early as next week.
Snyder said the alternative is “pretty interesting” considering the other choice is a 16% spike.
“We’ll see what the department heads say,” said Snyder, referring to the insurance committee. “It’s an idea. It cuts costs on our health insurance and that’s a huge burden on our employees. We definitely need to look into it.”
