I have been dismayed recently to see the announced budget cuts coming to our local school system.
I am starting this Blog to ask anyone interested to submit ideas that our civic leaders could consider implementing that would be a smarter, and more efficient use of our public resources!
I would like to start off be proposing they consider, along with the unions who they lay a lot of the intransigence on, in rethinking the way they are paying for their group health benefit! This cost is increasing significantly every year and is now second only to salaries in terms of overhead expense for most groups.
Actuarial studies have shown that we, as a nation, are a lot healthier than the carriers would have us believe. In any group, only about 5% are heavy utilizers (those that will max out their deductible in a given year), and that 50-70% of employees will not use their health insurance, or won't use it enough to go over their deductible.
For many years now, large groups have self insured themselves, paying a carrier to administer the plan and putting any overage of their stop loss limit back to the carrier(s) involved? If this is not available yes, the carriers may refuse to ofer this) then they might try a "Parial Self funded" approach where they pay the high deductibles for the employees, and the carrier picks up after the "Max out of pocket" is met. This puts the actuarial in shot in their favor as the deductible costs are paid out of the premium savings enjoyed from switching from a low deductible "rich" plan, to a high deductible plan.
The carriers do not want you to know, or care about this actuarial insight as they are collecting full premums on the 50-70% who are not using their health insurance right now, and that is pure profit to them! Let's take some of that money out of their profit column, and put in back in the cities school budget!
Unions, are you listening???