State health insurance costs to increase by 6.7 percent

DES MOINES - Members of the Iowa Executive Council are being urged to approve a two-year extension of state group insurance rates that would boost the state's share for health premiums by 6.7 percent for the 2016 calendar year.

Accepting the renewal option would extend the contract with Wellmark Blue Cross-Blue Shield to provide health, dental and life insurance coverage for around 32,000 state employees through Dec. 31, 2018, with subsequent rate changes to be negotiated on a yearly basis, said Caleb Hunter of the state Department of Administrative Services.

Hunter said the health premiums negotiated for the overall state plan next year appear to be reasonable and in line with rates that large entities with similar employee bases are experiencing in the health care market.

'From the information we have, that 6.7 percent increase seems to be similar to what other companies and businesses are seeing that are large-group employers like the state of Iowa,” he said.

Currently the state pays $447.5 million for its employees' group insurance program, while the 32,427 covered participants pay nearly $15.1 million of the overall $462.6 million contract. Under the proposed change which Executive Council members will consider next week, the overall estimated cost would rise to $484.6 million with the state's estimated share increasing to $463.8 million and employees paying nearly $20.8 million.

Hunter said the reason why the employees' estimated share would increase by more than $5.7 million under the proposed new plan is because members of the American Federation of State, County and Municipal Employees (AFSCME), the state's largest public employees union, are paying a $20 monthly contribution as the result of a new two-year collective bargaining agreement that was settled via binding arbitration last spring.

Non-contract and other unionized state employees pay 20 percent of their health premiums either through negotiated agreement or executive order. However, they have the option of reducing the amount of their insurance contribution by participating in a state-offered wellness program.

The state's contract includes multiple plans for single and family insurance coverage with various rates, co-payments and deductibles for state-employee groups. Hunter said the enrollment period for next year's insurance coverage for state employees opens Oct. 5 and runs into November.

The Iowa Executive Council is 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.

'The governor plans to carefully review the matter ahead of next week's vote by the Executive Council,” said Branstad spokesman Ben Hammes.

'But Gov. Branstad understands that the key to driving down health costs is having an overall healthier population,” he added. 'We do this by having Iowans take ownership of their own health through active healthy lifestyles.”

Hammes added that the Branstad administration's goal of making Iowa the healthiest state in the nation remains critical to the state's economic viability. 'The privately led and publicly endorsed Healthiest State Initiative coupled with health risk assessments can help identify potential risks and offer a path to a healthier life while keeping health insurance rates lower,” he noted.