Iowa health insurance costs to jump $35 million

DES MOINES - Premiums for 2017 health insurance coverage provided to Iowa's state employees will be going up an average of about 10.25 percent effective Jan. 1.

A group plan with Wellmark Blue Cross-Blue Shield was approved by the Iowa Executive Council in September.

The new rate schedule for health insurance coverage will raise the overall cost of next year's contract to $521.9 million, a projected increase of $35.3 million to cover 29,854 state employees through Dec. 31, 2017. The state's estimated share will increase to $496.8 million and employees will pay nearly $25.1 million, according to the state Department of Administrative Services (DAS).

The state currently pays in $463.8 million for its employees' group insurance program, while the 31,748 covered participants pay nearly $20.8 million of the overall $484.6 million contract, DAS spokeswoman Tami Wiencek said.

Members of the Iowa Executive Council - made up of Gov. Terry Branstad, State Auditor Mary Mosiman, State Agriculture Secretary Bill Northey, Secretary of State Paul Pate, all Republicans, and State Treasurer Michael Fitzgerald, a Democrat - said the health premiums negotiated by DAS officials for the overall state plan next year appeared to be less than rates that large entities with similar employee bases are experiencing in the health care market - even though the state faces a double-digit increase.

Approval was unanimous.

Fitzgerald said the overall price tag is significant because 'the state's a huge operation” and health care costs keep going up due to market factors and inflation. State employees are encouraged to take advantage of wellness incentives as part of cost-containment efforts, he added.

'We think this was pretty reasonable and is working out,” Fitzgerald said if the yearly group insurance renewal. 'We thought we were in a reasonable range.”

The state's contract includes multiple plans for single and family insurance coverage with various rates, co-payments and deductibles for state-employee groups - with several variations between non-contract employees and members of public employee unions covered by collective bargaining agreements.

Those variations may come under scrutiny in the coming months as Branstad welcomes a new Republican-led Legislature to the Statehouse for a two-year run.

Branstad administrations officials signaled the possibility of taking a different approach to health insurance benefits in the future by withholding any offers to unions in the state's initial proposal for new union contracts that would take effect next July 1. Those benefits currently are a subject of mandatory bargaining under Iowa's collective bargaining law.

DAS Director Janet Phipps, the lead state negotiator in talks with state employee unions, said she expects insurance provisions will be decided at a later time, likely by the governor and lawmakers.

Branstad said he would like to explore the option of creating a larger risk pool of public employees at the state, county, city and school district levels that would help drive down costs for all the entities that chose to participate. He said Republicans have not decided whether to change provisions in Iowa's collective bargaining law next session.

Newly elected Republican legislative leaders say they are early in the process of setting an agenda for the 2017 session, but have indicated interest in reviewing Iowa's collective bargaining law to provide more flexibility.

The governor has taken the position that state employees need to contribute more to the state's insurance costs.

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