EBENSBURG — A year after innovative negotiations on health-insurance costs and coverages, the Cambria County commissioners are exploring a new avenue that may contain costs for both the county and local municipalities.
The commissioners, getting ready for contract talks with carriers this fall, have invited the county’s 30 townships, 32 boroughs and the city of Johnstown to join the county in an intergovernmental health-care consortium.
Through a consortium, the goal is to “improve initial group premium pricing and (also) the overall, longer term stabilization of premium rates based on group size,” the commissioners said in a letter sent out two weeks ago.
By midweek, 10 municipalities had notified the county that they are interested in exploring the option.
“I think it’s a good idea. It’s the only way for municipalities to save money (on health packages). It’s a way to get a better quote from insurance companies,” said Kenneth Trimbath, a Portage Township supervisor.
The township will spend $56,400 this year for health insurance for its four full-time employees under a Highmark municipal employees trust, he said.
“We have a top-of-the-line plan,” Trimbath said. “But our workers have said if we’re able to get a better rate and increase their pay, they’ll be happy with that. I don’t know if (the county) can do better, but I’ll be happy to attend a meeting to see whether it can be done.”
Somerset County will spend about $2.37 million this year for 285 employees through UPMC, said Randy Welker, the county’s fiscal director.
“We negotiate (a plan) ourselves, just for this county,” he said. “For this calendar year, we were able to end up with a zero percent increase. We worked at it pretty hard (in negotiations with Blue Cross Blue Shield and UPMC).”
Welker said he’s intrigued by Cambria’s consortium proposal.
“It piques my interest,” he said. “But I’d be concerned to find out whether any local municipalities have the kind of coverage the county has, whether the benefit package is nicer at the county level.’’
Ebensburg Borough Manager Dan Penatzer also had mixed feelings.
“Absolutely, it’s a good idea, and I responded two days after I got the letter,” Penatzer said. “The bottom line is to get the best price you can.” But, he added that, although bigger groups were able to negotiate better prices just a few years ago, “I’m not sure whether the market allows for that now.”
Ebensburg’s costs in 2008 will be $216,000 for its 18 full-time employees, he said.
In late 2007, Cambria County – which had coverage for years under Highmark Blue Cross Blue Shield – switched to UPMC Health plan for a relatively low premium increase of 5 percent. The negotiations were tough with both carriers, the commissioners said.
In past years, the county saw double-digit increases in premiums as contracts were renewed with Highmark. For 2007, the increase was 7.9 percent.
It was estimated that the intensely negotiated switch to UPMC saved about $600,000. Cambria will pay about $12 million this year for coverage for 1,227 employees and hundreds of dependents, as well as 400 retirees.
UPMC’s coverage, which went into effect in January, was tailored to meet the county’s requirements, said Ron Baker, Cambria’s human resources director.
Baker and Cambria’s health-care committee – employee, union and retiree representatives – will be asking carriers for proposals in September to begin another round of negotiations for 2009.
“The larger the group, the more the insurance carriers take you seriously,” Baker said.
“We think this is a good, positive step for everyone,” said P.J. Stevens, president commissioner. “With all revenues stagnant, we’ve got to be looking at ways to save money.
“The barriers of parochialism may be forced to tumble.”
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Cambria eyeing health-care savings
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