INSURANCE Risk pool growth will avert big debt

The practice of billing claims against each department will end next year.
YOUNGSTOWN -- The risk pool for Mahoning County's employee insurance program will be deeper and wider next year. Officials say that will help keep small departments from drowning in insurance debt.
All 1,400 county employees will be lumped into one large risk pool beginning next year, instead of each department's essentially being its own pool.
"I guess the rationality and logic of that finally prevailed," said Matthew Stefanak, county health commissioner. Stefanak and Auditor George Tablack have lobbied for a change in the way the risk pool is constituted.
How it works
The county has participated in a self-funded insurance program since April 2002. That means the county's insurance premiums are combined and put into a pool from which claims are paid. When claims are filed, they are billed against the individual department in which the affected employee works.
Under the current system, each department pays a premium based on its past claims history. If a department's claims exceed the amount it pays into the system, the department must come up with the money to pay the balance.
Stefanak said that's not fair because if a particular department has one or two employees who suffer catastrophic illnesses in a year, the resulting cost to the department would be devastating.
"You could theoretically wipe out a smaller department just based on its claims costs," said Joseph Caruso, assistant county administrator.
Threatened pullout
The health department threatened to pull out of the county program earlier this year and get into another consortium if changes weren't made.
"We really want to stay with the county, but we can't sustain that kind of exposure indefinitely," Stefanak said.
Connie Pierce, county human resources director, said that policy will end when the county's current insurance contract with Medical Mutual of Ohio expires at the end of this year.
She said the county will probably contract with Medical Mutual again next year, but all the claims will be taken from the same pool of money.
Beginning in January, all the money will be put into one pot, Pierce said. If a department's claims exceed its contribution, it will no longer be on the hook to pay the difference.
Likewise, if a department's claims are less than what it pays in, it will not get a refund. The extra money will go toward paying claims for other departments.
"I like that because that's the point of insurance," said Robert Rupeka, common pleas court administrator. "You spread the risk and the money stays here in the county instead of going someplace else."
Price quotes
Pierce said her office requested price quotes in August from insurance companies to be the county's insurance provider for the next two to three years. Medical Mutual appears to have submitted the best proposal and she will recommend that commissioners contract with them again.
Smaller increase
Based on the proposals submitted, the county's projected maximum costs are expected to increase only about 2.2 percent next year, from the current $12.8 million to $13.1 million.
"When you look back at the double-digit increases we've seen hit the county in some years past, I think a 2.2 percent increase is tremendous," Pierce said.
Caruso and Pierce said the competitive bidding process and the county's stringent guidelines are what contributed to the minimal increase.
"The bidding process forced the insurance companies to really sharpen their pencils and give us their very best rate," Caruso said.

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