When those who know the details of health insurance plans used in city and county government, and those used at Memphis Light, Gas and Water Division and Shelby County Schools, sat down around a table last week, they quickly came to the conclusion that their workforces are essentially the same demographic.
They are employees with families, and they intend to have a long career path there once they get the jobs. And they are part of the larger trend of Memphians who suffer from chronic health conditions that more wellness and preventative measures could target.
The committee looking for better and more cost-efficient health care coverage of a pool of 36,200 employees is the creation of Memphis City Council Chairman Edmund Ford Jr., and it will explore such ideas as a private health exchange among the four government entities as well as a single plan across all four.
“What I’d like to do is look at funding for a study to explore alternatives,” Ford said, indicating the cost of a study would probably be outweighed by millions of dollars in savings.
The committee will also consult with various nonprofit groups involved in wellness initiatives and health insurance issues to solicit ideas and possibly cut the costs of a study.
Trinette Small, a business operations analyst for Shelby County Schools who was benefits coordinator for the former Memphis City Schools system, said insurance claims for chronic health conditions are driving the costs she sees even as she serves on an advisory board for Cigna health insurance.
“Unfortunately, when we go, the Memphis area is always one of the ones where the chronic conditions really, really inflate our insurance and our costs,” Small said at the City Hall meeting Thursday, Oct. 17. “That’s where the bulk of our expenses are coming from – is our actual claims. … What’s driving our costs are unhealthy practices and lifestyles.”
So wellness initiatives that could drop insurance premiums will be one of the items the ad hoc committee explores for the rest of this year and into the new year.
“If the demographics are the same … we won’t look at a completely different demographic and different challenge,” Ford said after the meeting. “Is it going to be easy to get there? No. Do we have challenges? Yes.”
Among the challenges are different splits in the shares paid by employers and employees.
For the city of Memphis and Shelby County government plans, the city and county pay 70 percent, while employees pay 30 percent. Memphis Light, Gas and Water has a 75-25 percentage split. The school system has moved to a defined contributions system that makes it difficult to give a percentage split for employees across the school system.
The Shelby County Schools health insurance plan is a $170 million program. Health insurance is a $124 million program for the city of Memphis, $58 million for Memphis Light, Gas and Water and $57 million for Shelby County government.
Ford’s preliminary survey of all four plans shows single basic coverage annual premiums range from $1,712 to $2,016. Basic family coverage ranges from $4,127 to $6,716 a year.
Ford also got an online quote from Cigna based on a 50-year-old person in good health. The quote shows an annual premium of $3,576 for basic single coverage and $8,484 for basic family coverage.
Since 2007, the utility and the city have partnered on health insurance to cut costs, and Ford said that is a possible model to be studied to see if a single system could be used for all four entities.
“If you use Memphis Light, Gas and Water and the city of Memphis as a pilot test, that could possibly happen. But I know that each particular organization has different employee-employer shares. I also know that quality and what is being offered – it also is different,” Ford acknowledged. “We will juxtapose and see if those are viable options. The last thing we would want to do is to save money for the city, the county, MLGW and Shelby County schools, but we don’t provide the same quality of insurance for the employees.”
The next session of the ad hoc committee is tentatively set for sometime before the Thanksgiving holiday.