Health insurance hikes pose challenge for public agencies

Sometimes, the jump isn't as big. Often, the increases aren't anything unusual for health insurance rates, and costs, in general.

But every fiscal year, those in charge of budgets with public agencies across Yuba-Sutter are seeing the same thing: Health insurance costing more.

Go back a few years, and the numbers are plain to see: A $700,000 rise in health insurance costs from 2001-02 to 2011-12 for the Yuba Community College District, even though there are six fewer employees.

In Yuba County, a monthly insurance premium for an employee with a family of four was $961 in 2005, including dental and vision. Now it's $1,734.

Continual increases are by no means limited to the public sector. But because most public agencies have employees working under labor contracts, adjusting to those continual rises is a tougher proposition. Robin Bertagna, Yuba City's finance director, said the contract with city employees doesn't expire until June 2014.

Because the contract doesn't have clauses to "reopen" on health insurance, last year's increase of more than $50,000 in health insurance costs, about 2 percent, was the city's responsibility.

"We look at all options," Bertagna said. "Our city staff tries to be pretty creative."

Eraina Ortega, a senior legislative representative for the California State Association of Counties, said personnel costs are usually the single biggest expenditure for counties and other public agencies.

As pressure rises from those expenditures, like payrolls and benefits, it puts pressure on an agency's ability to provide services, she said.

"You're seeing more places start wellness initiatives," she said, designed to encourage employees to lose weight or stop smoking and bring down health care costs in the future. "But those things can only go so far."

On the employee side, the executive director of the largest employee bargaining groups in Yuba and Sutter counties said his members also see the problem.

Gary Stucky of Sutter/Yuba County Employees Association Local No. 1, said although each county gets health insurance from different sources, both are seeing similar rising costs.

"You're going to be challenged with sustainability," he said, adding Yuba County has approached its managers, who aren't represented by the employees association, about paying 10 percent more for their health insurance. He said similar requests could come when his group's contract is up.

But some changes will have to come externally, he said.

"In general, we owe it to an aging population to make sure they have access to comprehensive, affordable health care when they need it most," he said.

Hard to tell if Obamacare will make difference

In less than a year's time, full implementation of the federal Affordable Health Care Act — or Obamacare, as it's known — is meant to begin addressing ever rising health care costs for all US residents.

Administrators at public agencies who have seen rising costs for years said they hope it helps. Whether it will is harder to know.

"We know millions more low-income residents in California will have access to care," said Farrah McDaid-Ting, associate legislative representative with the California Association of Counties. "For everybody else, it's not clear what the effect will be."

Part of the uncertainty, she said, is health care costs, like gas prices, don't follow other market indicators like inflation or the consumer price index. So even if more people are paying into the system, it's not clear costs will actually come down, she said.

Many public employees and the agencies they work for buy insurance through the California Public Employees Retirement System.

A system spokesman, Bill Madison, said as Obamacare implementation goes in during the next 10 months, CalPERS is also working on insurance adjustments to lower its own costs.

The main thrust of those adjustments is toward what's called accountable, or integrated care, where an insurer, doctor and hospital are all in the same place, encouraging efficiency and discouraging disputes, Madison said.

"What we've always tried to do is negotiate the best and lowest rates possible for our members," he said. "Our providers face those same sort of increases in costs."

CONTACT Rob Parsons at rparsons@appealdemocrat.com or 749-4785. Find him on Facebook at /ADcrimebeat or on Twitter at @ADcrimebeat.