BALLSTON SPA – In a small village, a $50,000 increase in the annual cost of health insurance for employees may seem excessive.
Yet local industry analysts say that is among the lowest amounts possible in the long-term trend of escalating health insurance costs.
On Monday, the Ballston Spa Village Board unanimously approved a measure that enables Mayor John Romano to prepare the 2018 contract renewal with MVP Health Care for the village’s employee health-insurance policy.
In its “schedule of salaries and wages” in the current village budget, Ballston Spa lists more than 90 employees, including many different part-timers such as crossing guards and library staff.
The village Police Department alone has six full-time employees and about 18 officers who work part time.
Romano reported that the MVP policy cost would rise from $486,341 in the current contract to $536,382 next year, or an increase of more than 10 percent.
The renewal contract has to be finalized before Dec. 31, he said.
The village has long opted for the most “reasonable” insurance rates for its employees, Romano added, citing the goal of keeping out-of-pocket costs low for them.
“It will be a topic of conversation come budget time,” offered Trustee Noah Shaw, during the discussion prior to the board’s vote.
Shaw indicated that there is no $50,000 “cushion” in the $4.1 million village budget to accommodate the insurance increase.
“Your renewal is the lowest,” offered Richard Schultz, the village’s health insurance broker, who attended the Nov. 27 board meeting.
Schultz said the village’s MVP plan is “by far” the most affordable in comparison to similar plans offered by the region’s three other major insurance companies: BlueShield of Northeastern New York; CDPHP; and Empire BlueCross BlueShield.
“This is the best plan out there in terms of benefits and costs,” he explained.
Schultz said “any health-care encounter” by employees—filling a prescription, a routine doctor visit, a sudden trip to the emergency room, etc.—drives up costs in the annual policy of any municipality.
The rate increase in Ballston Spa is simply part of a trend that has lasted for about 12 years, according to Schultz.
“All the plans across the board, across the entire spectrum, have seen double-digit increases,” he said. “There’s no way to soft-sell or sugar coat it.”
Schultz pointed to more than 60 New York State mandates that complicate healthcare decisions at the local level. Those mandates contain provisions that must be included “in every single health insurance policy,” he said.
Kelly Smith, vice president of sales at MVP Health Care, said efforts are being made at the federal level to allow out-of-state companies access to New York’s health insurance marketplace, which currently excludes them.
That type of change may drive down overall costs, she said, but New Yorkers would most likely find that cheaper policies equal less comprehensive insurance coverage.
“Our regulators simply won’t allow those types of policies to exist in New York,” Smith said. She called the New York healthcare market “robust” and “below where the national average is” in terms of increased costs for consumers.
For every $1 spent by the village, according to Smith, 85 to 90 cents “cover pure health care costs,” including upwards of 30 cents just for prescription drug coverage. She said the recent popularity of expensive “specialty drugs” has further complicated the matter.
“We have a very large problem in this country with pharmaceutical spending and how to control costs,” Smith explained.
For its prescription coverage, Smith said MVP partners with “the largest purchaser of pharmaceutical drugs in the country,” CVS Caremark, and “constantly” seeks ways to lower costs for consumers.
In addition, Smith said, MVP staffers work directly with hospitals to ensure that patients are not “being re-admitted to the hospital for the same condition.”
It is more than likely that 20 percent of the employees in Ballston Spa “are driving 80 percent of the costs,” Smith continued.
Ultimately, she said, people “need to take some accountability” for reducing insurance costs by living healthier lifestyles.
“We want people to go to the doctor for preventative health,” she added. But patients also should fully consider where they obtain medical care and the specific services they choose to utilize.
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