County insurance changes provide glance into budget

County manager George Wood gave commissioners a look into the challenges facing county staff in preparing for the upcoming budget retreat. File photo/TCS

By Jon Mayhew
Lincoln County
Even after making several changes to the county's health insurance plan, county manager George Wood told commissioners cuts would possibly have to be made in other places because the cost of the insurance plans are “still too high.”

Wood's comments come as the county prepares to delve into their respective budget workshops, looking at expenses and revenue while trying to keep tax rates and cost of services in-line.

One service, health insurance for county employees, provides a yearly challenge according to Wood.

“The challenge is the utilization of the plan and the cost of the plan,” said Wood, adding projections of a 12 percent increase of cost “would have affected employees and the county.”

“Neither can afford that kind of increase,” said Wood.

And in adding a projected increase of $518,000 in growth through 2011, Wood called the numbers and the outlook “pathetic.”

“Of that, $250,000 is from new revenue source, which is proceeds from the new ABC store,” said Wood. “Once the ABC store debt is paid off, we have to start providing proceeds to county's general fund over and above working cost and general capital.”

Wood said $400,000, meantime, is needed for the local government employees retirement system, which represents a 32 percent increase in one year's time. The system, according to Wood, lost 20 percent of its value in the stock market crash of 2008.

“The 12 percent increase represents about $600,000,” said Wood. “We asked our consultant to come up with options. The option we came up with is a six percent increase in county's cost with no increase in employee's insurance rates.”

Wood proposed – and commissioners unanimously agreed – to several increases to co-pays to doctor's offices, emergency rooms and for prescription drugs.

“Our insurance provider encourages the use of health savings accounts (HSAs) as opposed to preferred providers (PPOs) because the HSAs save Lincoln County in the long run,” said Wood, adding more than 80 employees switched to health savings accounts last year.

Despite the changes, Wood said there's still a long way to go in the county budget process.

“What we tried to do is minimize the impact on employee's premiums,” said Wood. “Even with those changes, we'll be spending $700,000 more annually on retirement and health care benefits for
our employees. We'll have to find some other areas to cut.”

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