SEMO considers creating own health insurance plan

Rising health insurance costs are draining the savings of Southeast Missouri State University retirees and leaving them increasingly frustrated with expensive monthly premiums that are costing some of them over $17,000 a year.

The university administration is considering dropping out of a consortium of six of Missouri's public colleges and universities and crafting its own health insurance plan for employees and retirees in an effort to lower health insurance costs.

The MSU Benefits Group consortium covers about 7,500 employees, retirees and dependents. Of that total, 750 are retirees.

Dr. Ken Dobbins, university president, said the Cape Girardeau school needs to decide by the end of the month whether to leave the MSU Benefits Group consortium in order to drop the health plan at the end of this calendar year.

'Something better'

Charlie Ireland, a retired elementary, early and special education professor who lives in Jackson, said the current system has been a disaster for retirees.

"There has to be something better," said Ireland, 62, who began teaching at Southeast in 1975 and retired in 1997.

Ireland said he checked into a private plan that would cost about $1,000 less a month in premiums than what he and his wife are paying. But Ireland said he can't get such insurance because of a pre-existing condition. He had minor surgery for skin cancer. While he no longer has skin cancer, it counts as a pre-existing condition, he said.

"I am locked into this," he said of the MSU Benefits plan. "I can't get out."

Ireland said neither he nor his wife are old enough yet -- they need to be 65 -- to receive Medicare coverage. For now the couple must pay $1,424 a month in insurance premiums, or $950 more a month than in 2001.

Ireland said he is one of about 250 retirees in the consortium that are under 65, and, as a result, not eligible for Medicare.

Comparing costs

Ireland said the Missouri Department of Conservation, the Missouri Department of Transportation, Missouri State Highway Patrol, the University of Missouri-Columbia and Southwest Missouri State University at Springfield all have less expensive premium costs than the MSU Benefits consortium plan.

They range from just over $556 a month for Southwest Missouri State to over $855 a month for the Missouri Department of Conservation, he said.

In the case of those state agencies and the University of Missouri, the employer pays part of the cost of health insurance premiums for retirees.

As a result, state highway patrol retirees pay $353 a month in insurance premiums for themselves and their spouses. For University of Missouri retirees, the cost is nearly $483, Ireland said.

Ireland said he is spending over $12,000 more a year for health insurance than a retired state trooper.

"Why does a retired professor from Southeast Missouri State University have to pay more than four times as much for health insurance as a retired highway patrolman or highway worker?" he asked.

Working benefits

Those in the consortium who haven't yet retired don't have to worry about sticker shock.

All of the schools in the consortium -- Southeast, Central Missouri State, Harris-Stowe, Missouri Southern, Missouri Western and Truman State -- pay 100 percent of the premiums for their employees. Employees have to pay the additional premium cost to cover their spouses and children.

Truman State and Central Missouri State also pay 100 percent of the premiums for their retired employees. The other four, including Southeast, don't.

Ireland said retirees and employees used to be in the coverage pool. But two years ago that changed, he said. The consortium now charges higher premiums for retirees, who as a group usually have higher medical costs, he said.

Ireland said the change was made to keep premium costs down for universities who are paying the bill for employees.

Dobbins said Southeast has been outvoted by other members of the consortium in efforts to establish "a more equitable" pricing policy.

Dr. Ivy Locke, vice president of business and finance at Southeast, said the consortium has been hit by high medical bills just like other employers. The average claims cost for retirees went up 62 percent between 1999 and 2002, she said.

Locke said Southeast could end up with higher health insurance costs if it leaves the consortium.

Southeast currently pays more than $3.4 million annually on health insurance premiums for its approximately 1,000 employees, and that cost is expected to increase by another $880,000 this year, Locke said.

In committee

A nine-member Southeast committee has been meeting since January to study the issue. It's been aided by CBIZ Benefits and Insurance Services, an insurance consulting firm out of St. Louis. Southeast is paying $15,000 to CBIZ.

The committee is preparing to survey Southeast employees and retirees on the issue.

Dr. Linda Heitman, assistant professor of nursing, is one of three people in charge of the committee whose members represent employee groups. She said the committee hasn't reached any conclusions yet. The committee will report to Dobbins.

Nancy Sublette, the consortium's executive director in Columbia, Mo., said the schools in the group are self-insured and calculate the premiums needed to provide the funding needed to pay medical claims.

With the ever-increasing cost of medical care, Sublette said health plans have to either raise premiums or reduce benefits.

The consortium, she said, has done its best to "manage costs." It's now looking at possibly offering health savings accounts where employees can set aside money to be used to offset insurance premiums when they retire.

When it comes to health care coverage, Sublette said "you get what you pay for."

mbliss@semissourian.com

335-6611, extension 123