COLUMBIA — University of Missouri System employees’ medical insurance premiums will increase in January for a third consecutive year.
Effective Jan. 1, the 13 percent premium increase will mean that employees on family plans will pay an extra $40 per month, and monthly premiums for single employees will increase by $14, said Betsy Rodriguez, vice president of human resources for the UM System.
Twenty-one percent of UM employees are enrolled in family plans, the most expensive health insurance option offered by the UM System. The largest share of employees, 47 percent, are on single-person, employee-only plans, she said.
“The university recognizes the impact medical premium increases will have for both faculty and staff,” Rodriguez wrote in an e-mail. “However, the university is facing higher medical costs and we simply can’t offset those any longer without passing along a portion of the increase to our employees.”
Causes behind premium increases
Rodriguez indicated that employee health has had a significant impact on the higher costs. She said in a recent benefits survey, one-third of employees rated themselves as being “unhealthy.”
According to UM’s claim administrator, roughly 7,800 of the 37,000 plan members didn’t go to a doctor between April 2009 and March 2010, Rodriguez said.
During the past seven years, the medical benefit costs for employees enrolled in the UM Choice Health Care Program, one of two available programs, have seen an increase of about 9 percent per year, with some years incurring an increase as high as 23 percent.
Because UM has a self-funded plan, premiums are driven directly by claim costs.
“In a majority of cases," Rodriguez said, “these claims can be reduced through early detection and treatment of diseases.”
Rodriguez said UM has been using a reserve fund to mitigate extreme fluctuations in premium costs, which have increased at an average annual rate of 7 percent during the past seven years.
But rising health costs aren’t the only factor driving the premium hike.
Rodriquez said that a smaller portion of the increase is due to state-mandated health care reform provisions, which include the extension of coverage to dependent children on parents' family plans until age 26 and an expansion of coverage for autistic children.
Rodriguez did not have an estimate of how many employees will take advantage of the expansion of coverage for dependent children, or how it will affect employee expenses.
At the UM System Board of Curators meeting in Springfield last week, Rodriguez said there will be no change in the university’s current premium payment arrangement, in which the employees pay for 27 percent of the premium costs and the university pays for the other 73 percent.
She said the rise in medical premiums would be the only increase in employee expenses, but added that the dental plan premiums will stay the same, and life insurance and vision premiums will go down.
Cost reduction strategies
“Encouraging employees to utilize our wellness program is the single largest opportunity for the university to lower its premiums,” Rodriguez said.
She said the program is important for both reducing costs and improving employee health.
At Missouri University of Science and Technology, a wellness-incentive program called “Miners on the Move” is being piloted. According to its website, “Miners on the Move” offers faculty $150 and other prizes if they successfully complete the program. If it is successful, Rodriguez said the system hopes to introduce the program at all UM campuses next year.
Rodriguez also said UM frequently reviews insurance plan designs and administrator arrangements for ways to reduce medical costs.
With regards to unnecessary medical expenditures, she said UM has “some areas of potential overuse.” To help prevent unnecessary medical costs UM currently requires preauthorization of expensive procedures and reviews them for “medical necessity and appropriateness,” she said.
“Together with our administrator we routinely review areas of potential high cost and ways to mitigate these costs,” Rodriguez said.