Travis County Commissioners Court
June 20, 2006
Item 8
We'll take 8 and then number 7. And number 8 is to consider and take appropriate action on the following employee benefit recommendations for the annual fy '07 benefit plan a is July 24th through August 23rd, 2006 as fy '07 annual open enrollment period. B is the fy '07 only proposed employee and county insurance premiums. B-1, recommended annual fy '07 premiums for active employees. B-2, recommended annual fy '07 premiums for retirees under 65 years of age. And b-3, recommended annual fy '07 premiums for retirees over 65 years of age. C is epo plan change for an increase of five dollars for office visit co-pay for primary care and specialists, effective October 1, 2006. D, co-insured epo as the default option if an employee fails to complete fy '07 annual open enrollment process in a timely manner. 8-e, plan amendment to cover doctor prescribed weight loss effective October 1, 2006 for eligible employees. F, wellness, health clinic items. F-1, immediate hiring of one additional full-time physician and one lvn to start July 2006 for the employee wellness and health clinic. F-2, fy '07 budget to include fund fog a mobile health and we willness unit, estimated cost of $250,000. And g, y'all thought I would never get to the end of this item, g is discontinuation of the epo plan effective plan year fy '08. And the intention there is to give county employees a full year's notice of the decision to terminate epo coverage. Good morning one and all. Good afternoon.
>> good afternoon. Alicia perez, executive manager for executive operations. We are here as we do -- as we come to you on an annual basis to discuss health care benefits and other benefits for Travis County employees. Usually we do this before -- certainly before open enrollment so that we can discuss the rates of health care premiums for the county and for the employees. We are set to begin open enrollment July the 24th through August the 23rd. We also have an employee hearing tomorrow starting at 6:00 in the Commissioners courtroom. And so --
>> to which the entire Commissioners court is invited.
>> yes, sir. That's correct.
>> and I will be here as soon as I can. I have a capital metro meeting to chair tomorrow afternoon.
>> and that invitation a also extended to all Travis County employees.
>> will you be here?
>> no, sir, I had already said when they were setting the date that I will be out of town tomorrow, so I will not be here.
>> everybody else will be here? The public hearing will be go as scheduled.
>> we'll go ahead and begin. You have a backup and you also have a yellow sheet of paper that was passed out that kind of condenses and gives all the rate on one sheet for easy dealing. But number a is approve July 24th through August 23rd as dates for fy '07 annual enrollment. That is a on the item. B is fy '07 annual proposed rates. And if you turn to page 6, seven and eight, that gives you all the details on the rates, but we also went ahead and put it on that yellow sheet. We've been very fortunate this year in that our trend, our health care trend, meaning the expenses that we have paid for claims, have been at approximately three percent. It's the lowest that we have seen since fy '02, which is October of 2001 since we went self-insured, that's the lowest we have ever seen. We have seen double digit increases up to 36% I think the first year, and then it has decreased since then. And I think that has not been out of just pure luck. I think we have put some measures in place, increasing payment on the epo and the wellness clinic and also education of employees that has caused that trend to go down. But for active employees, the increase is minimal on the plans. The highest increases of course on the epo because that is a 100% plan. We have three plans, three options that are offered to employees in terms of health care coverage. The first is 100% coverage of major medical health care with 100-dollar deductible when you go into the hospital. The other is a ppo, which is a 90-10 plan. The insurance pays 90% of major medical. And then there's co-insured epo, which is an 80/20 plan. Insurance pays 80% of major medical and the employees pay 20%. So for your epo as I stated -- for your active employees, on page 6 the rates have gone up by $11 on the epo for employee only. That's the highest increase at 14%. The other for the family and dependents goes from seven percent to nine percent, eight and seven percent, depending on the coverage that the employee has. The co-insured epo and ppo go across all tiers at three percent increase. That's what the increase was. Again, the lowest. And if you look, for example, at the cost of the epo, which is 100% coverage for major medical, the cost to the employee went up $11.
>> to alicia, when you say costs --
>> the premiums.
>> exactly what do you mean?
>> I mean the premiums that an employee will pay for epo, employee only will go from $80 to $91, which is an 11-dollar a month increase. If you were on ppo, which is what is provided free to employees, then of course there's no cost increase, but if you had an employee and one adult, the increase on the epo would go up six dollars per month. Very minimal increase.
>> okay. So we have the amounts for '07 on this yellow sheet, the proposed amounts, but not the '06 amounts.
>> the '06 you can find them on page 6. And it's right at the beginning, that's the subsidy that we provide to employees and families. Then you have the proposed '07.
>> page 6 is the same as exhibit 5?
>> you and I -- these aren't our page 6. This is not a page 6.
>> no.
>> we got a different page -- the stuff that we just got handed to us, page 6 has this. >> [overlapping speakers].
>> look at the first page 6.
>> that's correct.
>> and if you look down your left column, you see a yellow box that says fy '06 employee premiums. That provides you information on what the premiums are now in fy '06 across each tier. And then you can compare to the proposed. And then towards the bottom in red is what the increase will be for monthly premiums for each of those tiers. And three options. Any questions?
>> yeah. Talking about fortives?
>> yes, active employees.
>> so when the employees ask us, judge, what are these recommended increases based on? The answer is?
>> the increase in health care cost, which is at a trend of approximately three percent.
>> so we took that three percent cost and we did what with it?
>> we took it and we -- do you want to go ahead and address that?
>> the three percent increase is for two reasons. One, we don't want to fall below where we're at, but just as importantly, we did have increases in the stop loss premiums and increases in the administrative fees.
>> so is it three percent representative of the total increase in the cost of insurance to Travis County or the amount that we're passing on to eligible employees.
>> are we pass part of that along to the employee?
>> yes.
>> what did we use?
>> the agriculture grat increase is 3.8%. It ranges from 14% to the epo, which the county is paik piking up 14%. The employee is getting 14% as well. I think that's across the board with the percentage of increases dropping as you go across the tiers.
>> if you look at page 6, the county pays for epo county costs per employee approximately $496. What the employee picks up or will pick up, and this is 100% major medical coverage, is $91. That's the split, judge, if that answers your question.
>> and in terms of where you spread these things out, you saw much more of the need to apply the increase to where the increase was being generated, meaning those of us that have already flipped over the ppo, we're cost sharing a heavier burden, there weren't as many increases there because that's not where the prices were going up. That's one of the reasons it's going to get dropped.
>> it's costlier.
>> right. But it didn't distribute the costs of the epo to folks who had already gone to a higher cost sharing with the county. It's in the correct category.
>> okay.
>> that is under b, annual proposed rates, that is the synopsis for the active employees, people that are still employed at Travis County. We move on to approve the recommended annual fy '07 rates for under age 65 retirees as shown on page 7. And you also have it then on this one sheet. For those that are under 65, the increases are higher. This particular group has been separated from active employees, so you have a smaller group from which to blend costs. If you take the active employees, you blend children and less costs, more people. With this particular group there's, what, 248 of them? I think 240 dependents and -- I'm sorry, 240 employees -- 249. And those are employees and dependents. 208 employees and the rest of dependents. Dependents. The increase for them have gone up higher. If you look at the epo for a single employee that's retired, but not yet 65, the epo has gone up 29%. It will go up from $236 a month to 304. But if you look at the co-insured, which is also very good plan at 80/20, for an employee only, a single employee under the age of 65, and retired, the premium is $62 a month. That went up by 70% or $43, but it's still $62 a month, really quite affordable.
>> it's going to 105.
>> to 105. It was 62 going to 105. Thank you. Increasing by $43. What happens when someone reaches 61 is of course medicare comes in, and -- when someone reaches 65 is that medicare comes in and becomes the primary. So when we move on to the over 65, you will see those premiums lower, but that's because of medicare.
>> at 1120 in the bottom right-hand corner represents what?
>> the composite rate that Travis County will pay for individuals in this particular group.
>> so that means in this group the county's contribution would be 1120 for each? These are active employees.
>> retirees.
>> retire ooez under 65.
>> it currently is a thousand $10, and it was going up to $1,154. And the committee felt that that was more than we would recommend, so we suggested an 1,120-dollar compromise, so we actually reduced the contribution for the county and subsequently increased the contribution for the under 65 retirees.
>> and this is where I would like to get into a policy discussion. Forget the actuarial stuff for the moment, but in terms of policy if I have these three pages, pages 6, 7 and 8 in terms of what is the county paying for me, Karen, if I'm a county employee, an active employee, we're investing $629 per month per employee for an active employee's benefits. And if I'm over 65 it's $327. Help me understand and how do I explain to those who are on the most fixed incomes who retired when salaries weren't as great and they locked into much lower numbers, how do I explain that to active employees right now who are struggling and have kids that the county is investing twice as much money in subsidizing the insurance of people who do not live -- do not work here anymore and who are under 65, many of whom have gone on and are employed elsewhere? I don't get it. Why do they get $13,000 invested in their health insurance issues and, and working families and those that are on the most fixed incomes are getting half as much?
>> we have to go back about three years, and the committee, the benefits committee recommended to the Commissioners court and it was adopted to separate the retiree cost from active employee cost so it wasn't a subsidy from active employees. That's been in place for about three years. The feeling was that if there was an additional cost for retirees that the county should pick that up, not be placed on the active employees' premium. Traditionally, though, what would happen is you determine what the actual cost was for retirees, but traditionally you would roll those retirees back into the population and spread the risk, subsequently the amount of contribution would go down, although the money would be the same. You wouldn't recognize the under 65 retiree at $1,120. You would be blending that. That's why it appears, and it actually is and it stands out that we're contributing $13,000 to under 65 retiree. So you have to consider that traditionally that would be a blended rate, be put back in with the active employees. The assumption would be that they're working toward retierpt and paying into the plan now for when they do retire. So that's the scenario that created the problem. Rising health care costs, that's another factor, but that's the background of where we are today.
>> plus, if you've been here six months, we contribute $629 towards your insurance. You've been here 15, 20, 25, 30 years and retire, our contribution almost doubles.
>> only during 65 --
>> so we reward you for years of service.
>> no, that's not true.
>> in the under 65 category for senior retire es?
>> it's the only criteria we have in place at this point. We haven't done the slide in tenure scale that we're looking at, but they have at least eight years of service with Travis County.
>> do we know the average number of years that the under 65 have served Travis County?
>> actually, the auditor's office does know that. We've looked at those numbers. I don't know what it was off the top of my head. I believe it was 15 and a half.
>> it was between 15 and 16 years.
>> that's got to be the only reason. That's the only one that makes sense to me, I guess.
>> again, it's one of those things of what might have tradition, I think with gasb 45 we will have to take a guy began in this case breather and take a breath in term of what this county's going to be able to afford, and I think the move for us to go to the epo where there was going to be cost sharing, that was changing of trends. So it is hard for me to explain, again because of blended rates, why a very expensive group of folks are getting a higher subsidy than folks who are active workforce who even though you look at this yellow sheet and go, oh, great, it didn't go up very much, people have been at us for the last three, four, five years. They've seen their prices go up a huge amount. So I'm just again trying to understand why it is that this particular group would get twice the subsidy -- and again, judge, there are people who are in the over 65 category who are getting half the contribution and many of those folks have 15 years and more, and much more restricted income. So just help me understand. I'm still not there.
>> she can help. She raised her hand.
>> I think that what dan said explains why you're seeing what you're seeing now because of the split out. But the other part of that that is a big portion of how we got there is the fact that before the splitout, the retirees, regardless of age, were expected to pay a certain amount of premium. When the splitout came, if we had said that the amount that we subsidized the retirees under 65 was the same as the amount that we subsidized the employees -- and even if we did that today, you would see a jump in the retirees under 65 health premiums that would probably be on the order of 300 percent. I haven't done the figures and I understand, Commissioner Sonleitner's concern because I'm sure everybody on the committee is saying, why is she saying that? She was on the other side of the issue in the committee meetings.
>> I wasn't in a meeting.
>> no, me.
>> thank you.
>> no, barbara. Why is barbara saying that. Because in the committee meeting I was arguing Commissioner Sonleitner's approach in terms of reducing that amount, but the fact is that if we brought it all the way down to the level of the employees, that would mean that the premiums would be jumping for retirees from 236 to 836 approximately. And this has been one of the big concerns that the committee has had, how do you and your retiree jump the premium that much for that group of people? And the committee wasn't willing to bring it to you because it sounded so drastic, but if the court wants to go there, that's certainly a reasonable policy approach. But it helps to understand why they got there.
>> believe me, there are lots of folks in my office who right now are doing lots of research in terms of what it is like on the outside world in terms of what health insurance costs. And believe me, these numbers here are unbelievably modest compared to what the real price of health insurance is on the outside world whether you're with a private company or with some of the other governments. We had somebody coming back that used to work for the county that is over at the state, and she was astonished at how wonderful our benefits were. She didn't realize it until she left and went to the state plan of how great she had it on the health insurance compared to where she is now. And so to me I'm still trying to make this affordable not only for our active employees and those that are over 65, but a little bit more of the cost sharing of getting a little bit closer to reality. And what I found on this particular category, that while they did go up a big chunk, can you see those red numbers on that middle set of graphs, it didn't change the subsidy any at all. And I thought that the capping it was just a little bit on the low side, rather than 1120, it's like the county ought to be putting in a thousand. That's still a huge amount of money for that particular group, but there was no movement whatsoever in terms of the amount of the percentage, and those numbers still, while those folks might go, wow, that's a big change, it's nothing compared to the reality of what is out there in terms of getting health insurance from other sources, be it through an association or whatever. It just seemed to me that there ought to be a little bit more of the cost sharing in a group that is really a huge cost driver here. And it ought not be put on the backs of our active employees and it ought not be put on the backs of the over 65.
>> how much does the medicare pick up as far as health care, those that are 65 and older as far as percentage?
>> medicare pays 80% of the approved amount. And the retirees have to pay a premium to medicare for their part b coverage and I think it's like 70 --
>> no, next year it will be either 80 or 90.
>> it's in that ballpark. We took that into consideration when we set the over 65. But the actual amount they apay on the claim is 80% on the approved amount.
>> and then our insurance picks up the other 20% and it also picks up their deductible under medicare, which used to be $100, but I understand it's been going up and I don't know how far it's gotten.
>> what is it now?
>> the medicare deductible? I think it's 120 something.
>> I believe it's 150.
>> I'm not sure.
>> I knew it was 150 at one point. It may be going up to 200.
>> but that may be in the future because they set these things out five years in advance sometimes.
>> but that applies to the over 65.
>> 65 and over.
>> but the under 65, if the proposal for the county is to pick up the 1120, what is the '06 amount.
>> another 10.
>> 1110, is that correct?
>> no, 1010.
>> so if we take that back to -- was your recommendation the 1100 or the thousand?
>> a thousand.
>> if we take it back to a thousand, then what that means is that the under 65s that now pay $62 a month, which is 744 a year, would go from --
>> I'm sorry, where are you at?
>> I'm the co-insured, I think.
>> I'm comparing I think the 62 to the 105. Were you talking about epo?
>> it would be substantially more because if you look at the -- where it says total premium, like two sections up, where it says 1424, 1298, 1225, that's basically the approximate true cost of the coverage. So what the county doesn't pick up would roll over to the retiree. So if we go to a thousand dollars, then the co-insured epo would be at like 225. It will be approximate. The different tiers will be distributed differently.
>> so the epo would go from 744 annually to $2,700. That's three or four times, almost four times the amount. There's nothing magic about these numbers. There's a little play in them, a little play water. I don't know that -- I don't know that the county contribution going from 1110 right now to a thousand, reducing ours $110, we're not doing that for anybody else. The recommendation is to do it for a whole lot of other people, it seems to me that would be a whole lot more drastic than I'm willing to be.
>> even at a thousand it means that for the under 65, Travis County will invest $12,000 a year in that person's insurance, but for a regular --
>> we're doing it this year. 12 times --
>> this is really one of the first times --
>> this is one of the first times we have really been able to separate out the under 65s and the over 65s in terms of what are these blended rates, and for us to do the side by side by side comparison. And to see the different levels of subsidies. But that's one where the county -- it's only when you have to pick up more of the burden of your class that all of a sudden you start getting serious about things, seeing dr. Turnner here, about my goodness, I will have to to pick up more than that.
>> it's not dr. Turner's recommendation. You don't want in this fight, do you, dr. Turner? >> [ laughter ]
>> but in terms of people getting serious about things, that's where it's at. To me it's like my goodness, that is hard for me to explain.
>> Commissioner, I understand what you're saying, and let me say this to you. You've got some good valid points, but I've heard from --
>> it's a public discussion about policy.
>> didn't y'all do that in a work session. We have 47 pages here that we're all trying to flip through and read numbers. Somebody knows what line somebody else is on. And if you sit here and you start looking at -- we wonder why we're here until five or six. I mean, why are we doing this in a work session? I mean, so that we really --
>> we tried to get on a work session.
>> so we're going to talk about this for an hour and a half here while everybody has an opinion and then we'll do it in a work session.
>> I don't manage -- >> [overlapping speakers].
>> exactly. >> [overlapping speakers]
>> I've had some input from persons that have retired from the county and they're less than 65 years old. And one thing that they have told me is that, Commissioner, hopefully -- we're having a lot of difficulty dealing with their premiums increase and stuff like that. They would like it to hold pat and stay steady. But I did encourage those that were interested, and as we go through this process dealing with retirees, those that have come to me under 65, that there will be a public hearing process that a lot of things could be expressed. I can't speak for them per se, but I've heard what they have said. Go ahead.
>> you are absolutely right in terms of the public hearing. This is your -- our first discussion of this before you. You have a public hearing tomorrow. We plan to bring this back for a final vote the next Tuesday.
>> okay.
>> you have two Commissioners out next Tuesday.
>> only two next Tuesday and no meeting the week after that. How does July 11th look?
>> too late.
>> we might have a difficult time getting information out to employees and getting our system set up since we're online enrollment.
>> I wouldn't dream of taking action with Commissioner Sonleitner out, unless she insist that we do it without her.
>> and if other people are ready -- I'm ready to cast a no vote on this particular thing today. And if there are three votes to do it, we move on.
>> no, I'm not ready today.
>> alicia and I have spent about an hour and a half talking about this last night, so I've already gone through my little work session.
>> I did too, but I think I need another work session.
>> this is probably one of the issues that has been the most controversial. Part of the problem is that you have such a small group. Most companies would take this group and blend it in with your active employees and blend the rate. You do have a higher cost because these people are at retirement age, usually over 55, and right below the 65 when you're eligible for medicare, the costs are higher. The committee's wish was to I think not make the increases so high that then people would not have really options for health care other than to work until they're 65 or go without.
>> and the issue of contribution, I think the committee felt would be dealt with by the retiree committee at some point on a tier structure where the contributions would be layered based on years of service.
>> see, that's where I would be really, really comfortable if this were indeed tied to years of service because there are quite a few folks in there, I am sure, who have 15, 20 years who just started when they were babies and retired at a lovely, early age. But there are also people in here who have eight years or just a little bit more, have moved on to other careers at other places and are just choosing -- or are self-employed and are choosing to get their insurance this way, and that is also not fair to that blended group. So if it were a tiered thing based on years of service, I'd be very satisfied in terms of saying, do you know what, 20 years, you bet. You've earned that. But for it to be the same for somebody under 65 for 20 years of service, eight, I've got a problem with that.
>> with the, the tiers based on service for next year or this year?
>> that would be for next year at the earliest.
>> I think you need to give folks a little notice. The thing is kind of like me now, I'm on three medications. Over 15, 20 years when I never saw a doctor unless I was at a party. >> [ laughter ] whatever contributions -- I didn't need an exam. So the under 65 must feel the same way. That when I was young I was healthy and just kind of did my part because I was a team player and now I need a little bit more help than the others and the team is letting me down.
>> well, that's the concept of blending rates withtives and retirees.
>> but if we go the tier approach, which I think requires a little bit more discussion, I just think we need to give a whole lot more notice. It's like the epo, so give people a year's notice and they can take whatever steps they need to. And that's kind of like saying that the county needs to take this step and you've got a year to plan your future. And for those who want to move to some other plan that the county offers, they can, and if they don't, at least they have enough time to make other arrangements.
>> and what struck me is if you're on page 7, so everybody knows where we're at, if you look at the very top here, and I'm just going with the employee only category, the first category there, there was no shifting whatsoever in terms of the amount of the county subsidy. It was 81% before, it's 81% afterwards. It was 89% before, it's 89% afterwards. Whereas in the other categories, there was -- especially in the actives, the subsidies from the county went down. There was more cost sharing of the expenses. The active employees today have to pick up more of the costs. And for me for there to be no change whatsoever there didn't get me to where I thought it ought to be. Even if it were a one percent change, just sometimes change is very, very incremental, but it wasn't until we took that step four years ago, five years ago on the hmo/epo, when we went from zero to $60 a month, that was a big deal. But it was a slow changing in the culture of the way it used to be is everything was all paid for. With gasb 45, and again with setting out I think unrealistic expectations that people are saying, I'm banking on this, that there just needs to be a whole lot more talk about what are the expectations so that we are not locking into something that is not sustainable. Right now there are 249 people in this category. How many more?
>> I am a member of the health committee and pbo did run -- we're concerned about what the retiree cost of insurance is going to be, and we projected it out for 12 years. And we have been very concerned that from a public policy viewpoint, can this court, this organization continue to subsidize the under 65 and allow people to retire and be able to financially afford it. And I can tell you what the numbers are. Based on the total number of retirees over the next 12 years and the percent, the historical trend of the number that are eligible to retire versus those that retire, using those numbers with a five percent per year increase in hospitalization for those retirees, which is nowhere close to what we're experiencing. In 12 years your annual contribution for retiree health insurance is $43 million a year. You're currently projected for '07 at 4.9 million. You can't continue the current policy --
>> just ask gm. That's what it is. That's what happens.
>> and this is not gasb 45. This is current year funding requirements.
>> but gasb 45 only makes it worse.
>> right. All I'm saying is that I think that the court, from our perspective in pbo from a financing viewpoint, has got to address within the next year -- and I think that's what the committee decided, that we would recommend that we push very hard on the longevity and those type things for the under 65. I can tell you that the city of Austin contributes the same dollar amount for a retirees regardless of your age as an active employee according to my staff member that's a retired city of Austin. Now, they don't put them into their risk pool. They have a separate policy for retirees. We've tried I think in this organization not to do that. But I'm just saying that's what's happening on the outside.
>> that's what's happening in the city of Austin. That's happening in other major workplaces?
>> that they give the same amount of money?
>> right.
>> I believe u.t. Austin gives the same amount of money. I'll have to check that.
>> do you believe it --
>> do you know?
>> what's that?
>> if other organizations give the same amount of for other retirees as they do for active employees?
>> some do and some don't. Everyone is facing this exact same problem because of the cost of under 65 retirees is an issue across the board. We just got back from a nationwide conference of benefit people, and they're all looking at this same issue, they don't know whether to blend them in with theirtives because that kind of cost activities to the actives -- cost shifts to thetives. But the cost of the insurance, the true cost of the insurance is so high it's getting unaffordable for both the entities and the retirees. So the answer is some do and some don't.
>> is that an issue that you had planned to discuss today?
>> no.
>> when did you plan to discuss that with the court?
>> well, I think that the court's direction in terms of just my meeting with you was that you wanted to see gasb numbers. You wanted to go ahead and get some reading of the gasb numbers before you addressed some of the major issues because they are of such concern.
>> (indiscernible).
>> let's let you finish your presentation. We have some others who have come today to give testimony on insurance, I guess. How do you present this to the employees who are eager to come down tomorrow evening --
>> oh, darn --
>> we took the liberty of sending all the information to employees and fliers and e-mails. We mailed it out to all retirees also.
>> with draft at the top in bold letters.
>> absolutely. And proposed.
>> draft or proposed?
>> proposed.
>> and really the nature of my questions are to prompt a debate and it doesn't have to occur today, it doesn't have to occur this fiscal year, but at some point, not me, this court is going to have -- a future court is going to have to wrestle with the fact of how to make this a sustainable benefit whether it be for actives, whether it be for for our retire es who have the least amount of options. And it's going to be a hard discussion, but because it's hard, we can't say, well, we'll just put it off because every year it gets put off there are more and more people --
>> and we ought to give special invitation to some people who have a burning interest in this. I certainly have no problem with that.
>> we'll move on to retirees over 65 and the rates to them. Again, the rates were about 14, 15% for retirees over 65. The epo is the one that saw the most significant rate going up by -- for an employee only going from $111 to the 127. 111 to 127, going up by $16. And the contribution from the county is 327 for those retirees. Again, it's because of the medicare.
>> [one moment, please, for change in captioners]
>> ... The latest insurances that I have.
>> there's already --
>> most people are in the ppo. But they could move to co-epo and get a little cheaper.
>> we may get some movement because that's the last year of the epo.
>> I have 56, 36, 121.
>> yeah.
>> epo 36.
>> ppo 121, co-epo 36 and epo 56.
>> this may move more people with the rate going up another $68.
>> that completes our presentation in terms of the -- of the rates. Number c on the agenda item is changes for the epo plan, the changes are minimal. There is a -- an increase of $11 like we talked about, just for the premiums. There's an increase of $5 for the co-pay for office visits, the doctors goes up from 20 to $25. From 35 to $40 for specialists, and that's really the only two changes, they are minor changes to the epo.
>> how did we arrive at that number, 20 to 25?
>> the five dollar increase?
>> yes, sir.
>> the amount of contribution toward a reserve that the epo is making compared to the other two plans is much, much less. So we felt that -- that additional cost sharing would be warranted and instead of raising the premium rate more, we decided to recommend a cost sharing aspect of increasing the co-pays. So $5 seemed to be a reasonable amount, this being the final year of -- of the plan if the court approves that.
>> okay.
>> on d, approve the co-insured epo as a default option to an employee who fails to complete all 10 steps in the fy '07 annual enrollment process, we usually have a handful of employees that for whatever reason don't complete the reason rollment process, this just says they be approved and go ahead and enroll and the employee only will be enrolled in that case. Not their families. That's why it's real, real important for all employees to go through the process. We have made it easier by having the availability of individuals or employees to enroll right from their desk top. Via intranet. They don't have to go down to h.r. Anymore. So we do encourage everyone to enroll if they don't. Then we need approval to go ahead and just enroll them in the co-insured epo.
>> their monthly contribution goes to zero, but their share increases that -- if they actually get medical services.
>> uh-huh.
>> the 80. 80-20.
>> that's really not for office visits. For office visits really that's the cheapest plan, but if they have to go into the hospital then yes the cost is shared to 80/20.
>> other benefits go away. They get basic life and the co-insured epo, if they have disability or supplemental life, those things go away if they don't take care of their open enrollment process.
>> okay.
>> bariatric surgery, commonly known as stomach bypass surgery. We have had employees ask us to consider adding this to our benefit plan. We looked at it. We met with ms. Rodgers here to talk with the court, visited with the doctor that performs the surgery. We have talked to dr. Turner and I've had our cuss and discuss about this program and we just wanted to bring it to the Commissioners court that -- that -- let them explain what the advantages there are to -- to having this added as a benefit and asking to -- to make a decision.
>> I'm sandy rodgers, I'm a supervisor for t.n.r.'s road and bridge division. Also seven years post-op on a gastric bypass. Seven years ago, I was disabled. For three years. Unemployable. I was on anywhere from seven to nine medications a day. I provided you with a handouts on what my cost was on the medications and the doctor visits that I was required to go to, not the ones that would come up. The first year after my gas gastric bypass, I was off of 90% of my medications, after the first week of surgery I was off 100% within the first three months, which showed approximately a $9,000 savings to the insurance company within the first year. I'm now seven years out, not counting inflation, that shows a -- over a $60,000 cost effectiveness, you know, on just me. I do want to state that through the national institute of -- through the national institute of health, obesity is the second highest ranking cause of death in the american society. As well as morbid tees that it causes. Also obese patients are more likely to develop a range of associated disease such as heart disease, stroke, high blood pressure, gastric reflux, cancer, he is so esophogeal cancer and sleep apnea. The cost of addressing the medical needs for the co-morbidities, versus the cost of the surgery, you will see that it is effective to provide the surgery that would correct these secondary programs. Through the farmington study, nurse's health study, veterans administrative study, it also show that's morbid obesity, and obesity shows a rate of 12 fold for people with the excess weight having co-morbidities and early death versus that of their normal weighted counterparts. I also want to make the statement that this is addressed also through the americans with disabilities act, that they do reflect morbid obesity as being a protected disability. I am here just basically to show that providing the surgery does make a drastic effect on your employees. Not only as -- as employees but also on their life. It basically saved mine. Now, it -- through the -- again through the national institute of health, it shows that -- that the cost of obesity and their associated illnesses shows an estimated rate of $60 billion in losses a year through insurance, through covering, you know, the medical cost. I will turn it over to dr. Turner now so that he can explain a little bit more.
>> hello, as far as bariatric surgery goes, I'm sure your concerns are whether or not to cover it would it pay of on, would it be basic to cover it. We have talked about this in the benefits committee and we've had dr. Folkenbury come in, a bariatric surgeon, it's become clear the best way to propose this is to look at it as a tool that can be used for a select group of people, a select group of patients who really are quite on the end of the -- want kind of the end of the spectrum in terms of obesity and the kind of condition that's come with it's, the debilitating illness that it is. It really can be a beneficial tool for quite a few people. It's not for everybody. And there would have to be -- it's expensive procedure, however no more expensive really than -- than most abdominal surgeries. But it's a -- it's a -- it's important that the people that go into it realize that there is a -- there would have to be a systematic screening and some criteria they would have to meet and also a routine that they would have to keep up in terms of exercise and diet, monitored exercise even is what we are proposing for a whole year's time. And the goal actually in this is to -- is to hopefully if -- you know, for the select group, if you all were to approve this, the patients that would then qualify, hopefully after a year of -- of being on a systematic regimen of exercise and diet, they wouldn't even -- they would realize perhaps they wouldn't even need the surgery after all. Maybe they are hoping, we are hoping anyways that they would have -- see some benefit before the surgery would ever have to -- before the date of the surgery would ever come to be. You know, this is something that -- that there's a lot of controversy about. A lot of people think that -- that when people gain a lot of weight that they -- most people or everybody should be able to take it off in the same manner, but it's really not the case. There are people who really just don't have -- don't have the best genetics in the world in terms of how they -- what they do in terms of -- of fat metabolism and how they deal with extra calories. But -- but this -- this -- a lot of people get caught in a vicious kind of downward cycle of -- in the world of morbid obesity where they are almost too heavy, it's a catch 22 almost. The thing they have to do is exercise. They are so debilitated with their poor joints and the poor cardiac ability and pulmonary function that they have, it's very difficult for them. The thing they need to do the most becomes very, very, very I won't say impossible but very difficult. And so this is an option. It's just an option. And if you all have any -- I'm sure y'all have questions about it. I would answer anything that you you all -- that I can.
>> mine is more of a policy question. Probably in alicia's backward. What other local government health insurance plans covers this insurance? I guess that I'm thinking of the big ones, aisd, state of Texas, university of Texas, if it's separate from the state, and especially the city of Austin. The organization that we have found that has the most experience, the teacher retirement system, done over 3,000 of these surgeries.
>> that's retired teachers?
>> teachers retirement system, right. And of those surgeries about 50% were successful. There was -- there was a rate of -- of patients who don't adhere the post surgical instructions of following what -- I think >> [indiscernible] was saying. That's one of the reason that's we suggest this criteria because you can show your commitment before the surgery and then you have to continue on through through years after the surgery. What we are finding is that the failure rate is after the surgery people don't adhere what the instructions are. I can't recall if -- I don't think Austin school district covers that surgery. I don't know about u.t.
>> city of Austin. That's our usual peer.
>> they don't. But they are also... >> [indiscernible] >> [inaudible - no mic] I'm sorry.
>> we have been having inquiries from other governmental agencies, from Williamson county e-mailed me about this last month. City of Austin I've had e-mails going back and forth, finding out what other people are doing as well. It's the fastest growing surgery in the united states this year.
>> a lot of reason is that medicare started covering it. So --
>> do we think that weight loss surgery is sort of like keeping chronic diseases under control? Keeping them regulated. You have still got medication costs but there -- they are a lot smaller than if you -- if you don't control your chronic illness.
>> historically, I think what sandra said was after the surgery most of the people get off their medications or -- able to reduce the amount. But again it's those individuals that adhere the instructions post-surgery. And that's really where the serious complications come in is when they don't adhere those programs.
>> but from a county financial perspective, our interest in addition to caring for the individual, is that long-term the medical costs would be less.
>> diminished, yes.
>> without the --
>> that would be the expectation.
>> yes, that is correct. There are two caveats to the program. The first program -- the first would be that they would -- the individual that would be a candidate for the surgery would have to go into a one-year intensive orientation or monitoring of a diet, exercise, and the support group. If after that year they are still not seeing significant weight loss, then they would have the gastric bypass. They would also be required to provide a $2,500 deposit. The deposit, the logic of the committee was to have it as a assurance that they would then continue a year -- for three years afterwards. Maintaining the -- their diet, exercise and support group and maintain the weight loss and then they would be eligible for getting back -- giving back the $2,500. It was an issue that -- that was debated among the committee, again we have had a lot of inquiries, this particular surgery, it -- the benefits are that yes for the most part you do see a reduction in the need for medication, but also a prevention of diabetes, of hypertension, of other diseases that are co-morbidity with obesity.
>> barbara advised us that they have the legal authority to require that deposit?
>> it would be a lot the same as requiring a deductible. Initially they don't want to call it a deductible because of other ramifications within the way that the -- that the description is written. But we already have the authority to decide what portion of the cost of an operation or a medical procedure will be borne by the employee or the person receiving the coverage, whether it's their dependent or retiree. So this is merely saying that that -- that this isn't going to function as a deductible type of thing up front. But if the person honors the commitment after the surgery, which is the hardest time to honor it, because you have already gotten what you wanted out of the surgery, then -- then they have in fact put themselves in the position of making the county better off because of their reduced health risk and so we will give it back to them if they have complied with their commitment.
>> this would obviously have some effect on premiums. We don't know -- I mean, most like, a shortfall, until of --
>> right.
>> would there be a dollar amount that -- I mean, you know what I would -- what you would really like to see is -- is what does the employee base think about it? I mean, you know, it -- you know, it is a -- it may not affect, you know, the per person premium that much. I mean,, you know, if it's 50 cents, a person, of course, you know, comparing us to the teacher retirement, we have got 4,000, they have got 400,000, whatever their numbers are it's big, you know, they can take a deal along like that I mean but I would like to see, I mean, this is the kind of deal that you really like to see a buy-in from your employee base. That's, you know, if you get the employees that say hey I know some folks that that would benefit I mean versus the Commissioners, I mean, that -- I don't have a great deal to do with it unless you tell me that it's going to take, you know, $12 per month, per employee, take this thing on. Then if you start adding people to it, I mean,, you know, there's -- there's a lot of commitment, you know, that has to be made for this. Which is going to probably limit your numbers because you do have, you know, a weeding out, if you will, system that -- so the likelihood of it costing people a lot of money but I would think that people would want to know what might this do to your -- for your premium. I mean that's just me as one Commissioner thinking that I would really like to know, that would be easy to find out from employees, hey, what do you think about this in your next paycheck have something that says I wouldn't have an issue with that. Let people weigh in it on that really this is going to affect. Not just five of us.
>> Commissioner, I have gotten some comments because they were asked if they couldn't attend the hearing tomorrow night to e-mail me. I'm gathering those e-mails from y'all. I will have them printed tomorrow. But I probably have gotten 10 or 12, maybe even 15 e-mails directly about the bariatric surgery, all of them are in favor of it except for one so far. A lot of it just depends on a person's personal views on the issue. Seems like to me. But you are right if we could put a dollar amount to it it might make it clearer for the employees.
>> what would be the expectations of once you get the full year in, let's say somebody, some folks are ready to go October 1. You know, you wouldn't have the impact until a full year later. But what would you anticipate being a reasonable number to kind of budget for and then what would that mean in terms of the impact of that 25, $30,000 surgery? Assuming that it goes well. Because the results are not instantaneous, it -- we can all watch star jones on the view, it didn't come off right away.
>> actually on the surgery, this wouldn't be just for anyone. Someone 50 pounds would not qualify. You have to meet the criteria, the general criteria is 80 pounds or in the range of 80 pounds with health issues such as type ii diabetes, heart condition, might central valve -- mitral valve pro lapse, sleep apnea. Without that it's 100 pounds or a bfi of 40 or higher. You say the effect of the surgery is not immediate. The greatest amount of my weight came off within six months. And it's graduated since then. So like I think you do see a -- a fairly quick response to the surgery. Like I said I was off of 90% of my medications within one week. I was off 100% within three months. And the cost savings had already started at that point. For not having to provide those high medications that I was having to be on daily.
>> the other question that I would have is that in terms of other people that have asked for other kinds of procedures, where did this one rank? Was there a discussion of other kinds of things as opposed to why don't we get the county to pay for dental benefits? Why can't we get more on eye coverage or oh, why can't you phi my lasik eye surgery. Others have asked for different kinds of in vitro techniques who are having difficulties. Why this? Over other things that other folks have brought forward with very compelling stories behind each and every tale.
>> I think this -- I think bariatric surgery, the reason that we are bringing this forward is because the potential to reduce medical conditions that are attributed to obey best community, the focus on obesity being the major cause of a lot of conditions that the surgery might be as dr. Turner said an option in some isolated cases that really would help the person to gain their health.
>> also, when dr. Falkenbury spoke to us, he gave us the number that on average the studies that he's familiar with have shown that five years after the surgery, you start -- the surgery starts to pay off for itself with the reduced medical costs. If the patients had been occurring. That's on average five years. But, I mean, lasik or some of these other procedures, they are all nice, but obesity is a big cost driver for the county health plan and we just know that if that's true, if showing on average five years later the surgery pays for itself, then it's -- it seems to be a worthwhile thing in terms of long-term thinking. Cost-wise.
>> what's to ensure that that person is still here five years later, so that indeed the investment that's been made in this person's health indeed comes back to the county. There isn't anything I see that says that you have to stay here.
>> we don't require that cardiac surgery.
>> it's just one of those things that in terms of the one of the compelling reasons that we have seen investment on the other end there really isn't anything in there that says that there is anything --
>> ms. Wilson.
>> I think that another reason for -- for bringing this type of surgery forward as opposed to the -- to the ones that you specifically mentioned is that the court in the past has made a commitment to the concept of wellness. And this is a surgery that contributes to the overall wellness of the person whereas the others might create a more pleasant lifestyle for them, this will in fact make them less likely to be unhealthy in the future. If -- if it's effective. The other thing that I would say is when you are asking employees how they feel about a change in the premium, you have to remember that there's two edges to that sword. The premium will go up to pay for the cost of the -- of the operation. The premium should go down because of the reduction in health problems that result from the loss of weight. And so it's, you know, it depends on where you are on -- on that timing thing. As to whether an employee is going to say I like what it does to my premium because it decreases it because there are less health problems out there or I dislike it because this year we are in the first year and so we are seeing only the cost end not the benefit end of it. And it is true that over time, you know, these people may not stay employed with the county.
>> ms. Rodgers, thank you for --
>> we are glad --
>> -- coming today, giving us a real live face to associate with this request. You are a county employee still.
>> thank you, thank you. I would like to say the that I have lost more weight than I weigh today. So 20 pounds more is what I have lost, so --
>> congratulations.
>> thank you.
>> keep up the good work.
>> thank you.
>> pros and cons on bariatric surgery also on page 10. We will move on to f, which is wellness and health clinic items. We have two items there. We will address one, approve the full-time position to start July 6th. This would begin in fy '06. Dan?
>> I think the success of the wellness and health clinic is well expressed in the fact that our rates are down, our employee attendance at work is -- is -- absenteeism isn't as great as it used to be. And we have now reached a pivotal point in our work with county employees. We are looking to add additional staff in -- in July, so that we can keep the momentum going with what we have being able to go out into the county offices, off-site areas, being able to do the programs that we do here downtown at these offsite locations. The recent survey one of the major comments made by employees was the recognition that these programs are good. That they weren't able to take part in them. So our idea is to expand where we have been successful because clinics started to address the high cost drivers in the health plan. General basis we have been able to do that. Now we are able to drill down a little further and see that -- that we can do a better job of targeting the -- the particulars that lead up to these developing these health conditions. I don't want to spend a lot of time going through the clinic report. But I would ask you to look at exhibit 7, which would be the last page, and for the three months, three month period January through March of 2006, the clinic saw 969 patients. Those are actual patients. They don't include the wellness classes or the exercise classes or necessarily the screenings that have been going on. The patient savings was 14,755, the health plan savings was 76,025. The total savings based on the clinic utilization was $90,780. I think when you take that and you look at the reduction in health care costs, and if you just take 10% of that reduction, that's close to $1.9 million, it's obvious that the clinic pays for itself. And adding two additional staff would allow us to increase our patient visits, being able to schedule more patients to see -- being able to go out into the community and -- and see county employee who's can't travel to one of the clinics will increase the office visits and increase the offset costs to the health plan to more than justify the cost of adding those staff members. So we are asking the court to approve a mid year admission of these two professional staff members so that we can continue to provide the programs, expand on them. One of the areas that we want to expand into is women's health because of its statistics that we've shown that -- that even though we have a larger population of patient population of -- of women in the clinic, that -- that we are seeing more serious diagnoses. The -- diagnoses for women in the high cost driver diagnoses are twice that of men. And -- in some situations. So we recognize that there's a woman's wellness and health program that has to be developed. On the other thing we need to do is reactively involving our retirees in our wellness program and disease management. As leroy said in 12 years, we could be looking at $43 million. If we don't start now, we may eventually get to that point. If we do start now, the disease management, wellness education, we have an opportunity to curb some of that increase and --
>> curbing, we don't have -- any of our retirees are not participating in -- in going to -- going to the wellness clinic.
>> some of it. It's very, very few.
>> why is that, though? I thought it was for -- I thought it was for all -- yes.
>> [one moment please for change in captioners]
>> you know that the committee wanted us to bring forward at the cost of 250, we need to develop that particular proposal a little bit more.
>> my question would be for discussion next time, by the way. What if we were to hire the two people requested in f 1, how would we use them without the mobile wellness unit.
>> well, discussion next time.
>> okay. Think about it a little bit, mr. Mansour, that was supposed to be a surprise request by the way.
>> surprise.
>> okay.
>> think about that and we will discuss it next time.
>> yeah.
>> and there's one more item, g.
>> right.
>> and that's approve discontinuing the epo plan effective fy 2008, again this is a recommendation that we talked about now for several years and feel that -- that we should probably give people enough time like one year to make plans to go on to the ppo or the co-insured epo. This is a very rich plan. It is expensive. We have added the cost to employees, but it's one which -- which I think that as we are looking at the increase in health care costs overall, that it's one that we can ill afford to continue.
>> if we approve that one, I think doing an open enrollment, everybody that enrolls upon departure, it -- would receive a large font simple english notification of this and then throughout the year, we ought to give them four or five friendly reminders for this time next year it should be warn out.
>> yes, sir.
>> all right.
>> kind of a big move.
>> we are given a year for prepare for it.
>> the judge, is g something that we would act on today? I don't know if --
>> I think we ought to wait until tomorrow night. Somebody ought to come up with a real good reason not to do has.
>> there is a comment on this item in the e-mails that I'm getting.
>> what did you say?
>> I'm getting a lot of employee comments on the e-mails that I'm getting on this one item.
>> g?
>> yes.
>> related to the pricing of the dis-- discontinuation of the epo, they love the epo, they don't want it to go away.
>> I would --
>> more than simple english.
>> bigger font.
>> simple spanish.
>> it won't look right for our number one advocate of this action to not be present tomorrow comments that are given.
>> I made it real clear when you were trying to set the date that I was not going to be here tomorrow.
>> I left you an e-mail, judge, some time ago that I will be >> [indiscernible]
>> did the county judge set this date?
>> we checked with -- with folks --
>> the answer is no.
>> no.
>> the date came from the committee.
>> right.
>> yes.
>> but --
>> we wanted to -- we wanted to debt it done. And --
>> yes, uh-huh.
>> I could tell you all --
>> yes, absolutely.
>> that I would not be able to make that date.
>> thank you all for bringing us these outstanding recommendations. We will need to huddle after today and try to figure out when to have hem them back on for action. Do we feel informed enough to move from today to action or do we need a short work session?
>> I certainly would like to have a work session.
>> your next work session is not until July the -- the 20th.
>> we have got one July the 11th and I think that was -- that was full, you had six or seven items.
>> but if the court chooses to have a special --
>> a work session --
>> this court may have the for alter that schedule.
>> you might have a work schedule on a Monday or Wednesday or Friday if it was what the court wanted.
>> I don't know if the court wants that.
>> scratch that barbara. So, yes, if that is the pleasure of the court certainly.
>> but we don't -- there may be a full agenda on those work session dates, but that doesn't mean that this is not a higher priority. It involves something that has taken this long.
The Closed Caption log for this Commissioners Court agenda item is provided by Travis County Internet Services. Since this file is derived from the Closed Captions created during live cablecasts, there are occasional spelling and grammatical errors. This Closed Caption log is not an official record the Commissioners Court Meeting and cannot be relied on for official purposes. For official records please contact the County Clerk at (512) 854-4722.
Last Modified:
Wednesday, June 21, 2006 12:13 PM