Idaho state government eyes 10 percent increase in health care costs next year

Via the Idaho Statesman

After a 9.3 percent increase this year, next year’s set-asides for Idaho state employee health insurance costs are forecast to increase about 10 percent as medical and prescription costs continue to rise, a state legislative committee heard Wednesday.

The increase is more or less in line with those other large public employers are seeing, insurance plan administrators and other state officials told members of the group insurance and benefits committee. The panel was created last session to study the total state employee compensation package and recommend changes.

The state’s outside health cost consultant projects that Combined treatment costs are expected to rise eight percent overall, reflecting a 6.5 percent increase in medical expenses and a 13 percent increase in prescriptions, committee members heard.

“What obviously stands out is the cost of the health care delivery system itself. That is going to wind up being where we’re going to concentrate our efforts,” said Rep. Fred Wood, R-Burley, a committee co-chair. “Without monkeying with the benefit package, how do we address the cost drivers in the current system?”

The state’s group insurance plan is administered by Blue Cross of Idaho. Some of the numbers cited Wednesday:

The state sets annual insurance appropriations based on a set contribution for each of 20,200 full-time positions in the workforce. This year’s figure is $12,240. The state’s actual cost is less, however, based on what it actually pays in provider claims. About 18,800 employees are on the state plan, along with roughly 27,000 dependents.

Next year, the per-employee appropriation is set to climb to $13,460, a 10 percent increase from the current rate, based on actuarial projections on treatment costs. With 20,200 full-time positions, the total state allocation next uear is $272 million. But total state costs are projected at $264 million, $237 million of which is actual claims to providers.

The rest is administrative costs, fees related to federal health care reform, and the state insurance premium tax. What the state doesn’t spend gets set aside in reserve.

On the employee side, co-pays and deductibles amount to another $65.7 million, reflecting the roughly 80-20 cost share between the state and employees.

Including dependents, a total of 46,500 people are covered by the state plan at an average per-person cost of $5,677.