Government is good at spending money. So when it finds a way to save money, it’s worth taking notice. The city of Bend has found a way to save some money on health care.
Back in 2010, the city switched from what it called “a very rich plan” to a high-deductible plan. The switch could be all the more important in a few years. A new requirement of the federal health care law is that “Cadillac” health plans get hit with an extra 40 percent tax, starting in 2018. Bend taxpayers don’t want to get stuck paying for that.
A Cadillac plan under federal law is one that exceeds $10,200 in benefits annually for an individual and $27,500 for family plans.
Under Bend’s old plan, employees had to pay only a small co-pay for most doctor visits and prescriptions. The deductible was $200 per individual and $600 for a family.
Bend employees used to have one premium rate for both individuals and families. In August 2010, it was roughly $1,450 a month. An employee paid about $100, and the city paid the rest — about $1,350.
Premium rates were increasing at an average of 9.25 percent a year. Now the deductible is $2,000 for an individual and $4,000 for a family.
Bend also now has two premium rates. The 2013-2014 rate, for an employee only, is $44.22 per month and the city chips in $399.77. For a family, the employee pays $111.04 and the city chips in $999.45.
The procedures covered and physician network are the same now as they were before the switch. Premium increases for the city have also been relatively small, going up about 2.6 percent each year.
Rob DuValle, the human resources director for the city, says now that employees have more of a vested interest in controlling cost, “we have found that employees have taken significant efforts to identify the lower cost vendor, explore generic options, as well as learn from one another about how to become aware of all options available and be a savvy consumer.”
City employees still get a better deal than what a lot of Oregonians in the private sector get. But the city has moved in the right direction.