Health-care costs bite city, workers

Cape Girardeau is responding to runaway health-care costs for city employees by increasing their deductibles for coverage by 150 percent.

Even with the change, city taxpayers will be hit with a 25 percent increase in coverage costs for employee health care.

City workers who include their spouses and children in their plan will also pay about 25 percent more for coverage, an increase that in many cases will erase pay raises granted this year.

The city council voted Monday to accept these changes which apply to the city's 333 full-time employees and 90 enrolled dependents.

"Medical insurance as we all know is quite an animal, and we're having a difficult time as a country dealing with it," said David Johnson, a representative of CBIZ, the city's Kansas City-based health-care consultant. Johnson addressed the council during its 5 p.m. study session.

Employees will notice the pinch.

A police officer with 12 years of experience typically will see his or her annual pay rise by $1,499 next year, the cost of coverage for a family under the city's plan will rise by $1,500 during that time.

Cape Girardeau, said Johnson, had a particularly bad year in health-care claims in 2006. Claims rose 23 percent to $2,315,716 from the previous year.

But the costs were not evenly distributed. Twenty employees or about 3 percent of the work force accounted for almost 50 percent of the paid claims.

That means the city had a small number of high risk workers in poor health.

Johnson said this is typically a result of an aging work force and employees not seeking preventive care for certain conditions.

"Studies show 50 to 70 percent of all claims are a result of lifestyle choices," Johnson said.

He listed these as smoking and obesity, which often result in diabetes and high blood pressure.

Other cities and corporations have used methods such as giving workers an annual self test called a health risk assessment form and instituting incentive programs.

"You can say, we're going to have a smoking cessation program and everyone who completes it is going to get a $25 gift certificate to Target. And hopefully they won't spend it on cigarettes and candy," Johnson said.

The city will hold study groups with representatives of each department in February to evaluate how best to alter its coverage in 2008 and worker health in the upcoming year.

City officials hope employees will take advantage of a change to the package promoting advance treatment. Preventive care services that were previously covered only up to $150 will now have no limit.

City staff has already briefed all employees on the changes and apologized for the late announcement. It was hoped that waiting would allow the spike in costs to even out through less busy months. That did not happen said Heather Brooks, assistant to the city manager.

tgreaney@semissourian.com

335-6611, extension 245