Tuesday, August 23, 2011

Feeling the Benefit Squeeze

These days many of us fortunate enough to be state employees during the Great Recession feel like we're perpetually in the crosshairs from any number of directions--from lackluster union negotiations on our bargaining contract with DAS to Oregon's Public Employee Benefit Board's list of proposed changes and rollbacks to our health coverage.  In fairness, I'm just thankful to be working right now.  The recent controversies have encouraged me, though, to do a little research regarding the open market costs for health insurance coverage--which is really just part of being an educated consumer these days.

Yes, good health coverage is terribly expensive.  That's not really news, though.  What surprised me was that it seemed that the open market rate quoted by one HMO appears to be about the same as what the state is currently paying on my family's behalf.  That's a little odd when one considers the large pool of public employee members on whose behalf PEBB negotiates with the insurers.  (This small state agency, governed by ORS 243, is now part of Oregon's Health Authority.)  

Now, I am going to fast forward a bit.  Ordinarily, I'd be happy to dig into this issue further and become as much of a pest to PEBB as I'm sure the local union thinks of yours truly.  Unfortunately, I am unable to devote any further time to this matter because of some urgent personal issues requiring my full attention.  (Prayers appreciated for an unnamed family member.)  

I will only add that the letter copied below was never really satisfactorily responded to by PEBB.  Part of the reply I did receive advised that that the state employee's health plan was "community rated," appearing to suggest to me that PEBB doesn't presently negotiate significantly lower rates based on the large pool of its members.

At any rate, I am copying part of my letter to PEBB below.  If you're interested, I hope you will look into this matter more thoroughly, perhaps picking-up where I left off.  Taxpayers and state employees alike deserve certainty that PEBB is working to make the healthcare delivery model as efficient and cost effective as possible.  Presently, I am not convinced that the negotiations between PEBB and insurers are being undertaken with as a great a sense of urgency and vigor as is appropriate in these times.   As always, I look forward to hearing from readers on this topic.

...I am trying to become a more informed consumer when it comes to the significant benefit cost increases slated for state employees next year.  As I explained in my previous message, I was a bit taken aback that very similar medical benefits enjoyed by state employees are also available to the general public at roughly the same cost.  (REDACTED) replied that the plan was "community rated," suggesting that PEBB doesn't presently negotiate significantly lower rates based on the large pool of its members.

My question boils down to this...  For an agency that administers state employee benefits with more than twenty employees and a fairly significant budget, how would state employee benefits suffer if PEBB were to disappear from the current healthcare benefit environment altogether, permitting employees to obtain health benefits directly on the open market--retaining, of course, the employer contribution and Section 125 tax status?

PS.  No dwarf hamsters were injured in the taking of the above photo.  :)

UPDATE (8-31): Today I received information from our HMO that addressed most of the concerns raised above.  The health insurance quote I received initially was too low.  This incorrect quote raised the concerns that sparked my post.  Not only has PEBB apparently negotiated a significant discount over the closest plan publicly available, but the co-payments (at least for 2011) are also better.  So, because of the bad quote, the central concerns expressed above appear to be a false alarm.  (If you are a state employee with concerns regarding PEBB or SEIU, you may wish to drop a note to Statesman Journal state workforce reporter Dennis Thompson.)

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