Board Approves Healthcare Insurance Rates

By Jeff Murphy, September 26, 2018

WARRENSBURG, MO – While continuing to keep costs as low as possible and provide quality coverage, in a special meeting by telephone Sept. 21, the University of Central Missouri Board of Governors approved accepting a zero percent rate change in one of the employee healthcare insurance plan options and a 1.83 percent rate increase in the remaining two options from Blue Cross and Blue Shield of Kansas City for the 2019 benefit year.

The increase affects individuals who are enrolled in the Blue KC Preferred Provider Option (PPO) and the Qualified High Deductible Plan (QHDP) with a health savings account (HSA) requirement. No increase will be charged for individuals enrolled in the customized Exclusive Provider Option (EPO), which was the result of a trailblazing agreement entered into for the 2018 plan year by UCM, Blue Cross-Blue Shield of Kansas City, St. Luke’s Health System of Kansas City, and Western Missouri Medical Center in Warrensburg.

Bill Hawley, interim chief financial officer, provided information to the board about the need for a rate increase in the two plan areas, as insurance costs to the institution for these two plans have climbed. He pointed out that based on the calendar year, Jan. 1 to Dec. 31, 2019, the total premium cost for these plans is projected to be approximately $10.5 million. He said the contracted term rates for the EPO are fixed for the 2019 and 2020 calendar years, so those rates will remain flat. The PPO and QHDP plans, however, are subject to rate changes based on plan performance and variations in health care cost. Because of the high initial enrollment and positive claims experiences for the EPO plan, the university has been successful in keeping premium changes to a modest increase for the PPO and QHDP for all levels of coverage.

The university utilizes a three-tier system to provide different coverage types for employees and their families under all three health insurance plan options. With the rate increase for the PPO and QHDP, the monthly out-of-pocket cost to employees who elect employee-only coverage will range from 88 cents per month to $2.64 per month depending on the income tier of the employee.  The maximum increase faced by any employee will be $21.51 per month, which occurs for employees in the highest income tier who elect full family coverage under the PPO or QHDP.

Hawley said the university currently has approximately 400 employees enrolled in the EPO, 469 in the PPO and 42 in the QHDP. The university continues to encourage participation in the EPO.

The EPO emerged out discussions with Blue Cross-Blue Shield of Kansas City that began more than two years ago amidst serious financial issues associated with the rising cost of providing health insurance, which had increased by about $1 million annually. The EPO gives UCM an opportunity to take a more strategic approach to improving health outcomes to reduce costs associated with outpatient visits, emergency room visits, hospital inpatient admissions, and pharmacy. It offers a strong benefit at a lower cost for employees while also providing long-term financial benefits for the employee and UCM.

A component that is extremely rare in the health care insurance arena, the EPO also includes guaranteed rates with no cost increases for the university and for its employees for the three consecutive years, beginning in 2018.

In the near future, the university’s Office of Human Resources will contact university employees to provide information about employee health care, costs, and the enrollment process for the coming year, including informational sessions that will help employees better understand their options.