Hefty Health Insurance Request Shocks Hernando County School Officials

As President Barack Obama prepared to take to the airwaves to defend his health care overhaul last week, Hernando school officials got a little insurance sticker shock of their own.

The district's insurance carrier, Blue Cross Blue Shield of Florida, is seeking a 21.5 percent rate increase.

"We expected increases in health insurance, but you don't really expect 21 percent increases," said Heather Martin, the district's executive director of business services. "It's very disappointing in these economic times."

The actual increase will likely come in at least a few percentage points below that, Martin said. Last year, for example, Blue Cross started with an 18 percent increase. By tweaking plans and raising deductibles and co-pays, the two sides brought that down to 12 percent.

Martin said she's hopeful this year's increase will be closer to 15 percent and that the district's insurance committee — composed of staffers and members of both unions — had made progress toward that number during talks with Blue Cross on Wednesday.

Blue Cross declined to comment beyond a written statement issued through spokesman Mark Wright.
"The specifics of our negotiations with any client are confidential. However, I can say that for groups such as this, projected claims experience for the upcoming plan year is the determining factor for premium rate calculations."

In other words, the company uses the district's claims history and estimates for what next year's claims will be to justify the rate increase.

The district's history isn't exactly pretty, Martin acknowledged.

Claims have been "relatively high" in recent years, she said. Last year, Blue Cross paid more than $14 million in claims.

"We are not an extremely healthy district," Martin said. "We have not improved it."
Martin noted, though, that the district is "punished" for the lack of urgent care facilities in the county. That forces employees to go to hospital emergency rooms, an expensive way to get urgent care that drives up the district's clams, she said.

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The School Board has agreed in past years to have the district absorb most or all of insurance premium increases and should try to do the same again this year, said board member Sandra Nicholson.

"If there's any possibility of us being able to eat the increase, I think we probably will," Nicholson said.

That could be a tall order, considering this year's proposed budget has only $1 million in reserves that aren't set aside for some purpose.

But it would help employees who have seen out-of-pocket costs rise, said Colin Davies, president of the Hernando United School Workers.

Davies said some employees have decided to go without insurance because they can no longer afford it, and he predicted that number could rise.

"You choose whether to eat or have insurance," Davies said.

The unions accepted smaller pay raises last year in exchange for the district covering more insurance premium costs. Insurance will likely dominate negotiations again this year, said Joe Vitalo, president of the Hernando Classroom Teachers Association.

Vitalo expressed the kind of sentiment voiced by many Americans and that Obama says is motivating him to get health care reform done sooner rather than later.

"It's probably the most legalized form of extortion there is," Vitalo said.