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Report: City's health plan saving money

November 06, 2009|By Mike Wynn

A self-funded health insurance plan for the city of Winchester is about $200,000 under budget, indicating that the city's new approach to providing health coverage has proven successful, according to a report Tuesday.

Mark Morgan, president of consultant firm Sherrill Morgan, said the plan came in more than $115,000 under budget during its first year of operation in 2008-09. Since then, the program has performed even better, he said.

"There is no financial health care crisis in the city of Winchester," said Morgan. "In fact, there are reserves."

Commissioners Rick Beach and Shannon Cox spearheaded the move to a self-funded plan two years ago in the aftermath of skyrocketing costs through private firms.

In the 2008-09, the city budgeted $1.2 million for the program, but only spent around $1.1 million.

The cost of the program remained about $5,000 more expensive than a private plan quoted through Humana. But, Morgan said the city's plan provided higher quality and may have added beneficiaries, accounting for the difference.

Morgan reported that city and county governments in Kentucky spent an average of $8,800 per employee in fiscal year 2008-09 to provide insurance. In contrast, Winchester spent $8,450, he said.

The plan is designed to cover routine medical expenses for employees. The city carries an additional insurance policy through a private firm to pay for any catastrophic costs. Morgan said the catastrophic policy was factored into the figures in his report.

"We realized we needed to take some initiative, not only to check costs but also to give our employees quality health care at an affordable cost for the city," Beach said. "So far, this is working."

Mayor Ed Burtner also praised the plan and commended commissioners and city staff for their work.

"There is way for us at this point to know how what's going on at the federal level is going to impact all of this, but you can bet it is going to impact it," he said. "I just hope it doesn't have the effect of destroying all the good, hard work that everybody in this room has put into it."

In other business,

— A $455,400 financing agreement was authorized with Branch Banking and Trust Company (BB&T) was at a 3.94 percent interest rate for seven years. The loan will be used to finance a new pumper truck.

— The commission authorized an $11,539 contract with CIM Technology Solutions of Richmond to install an audio system for the commissioner chambers of City Hall.

— A $14,480 grant agreement with the Kentucky Office of Homeland Security was approved to purchase terrorism incident prevention equipment.

— The employment of patient transfer specialist Dennis Walling was terminated. Brian Sewell was promoted from maintenance worker II to operator I. Angela Townsend was reclassified from administrative assistant I to administrative assistant II. Joshua McFarland was reclassified from police officer II to police officer I.

— Commissioners approved a zone change from professional office to neighborhood business for a section of land at 330 W. Lexington Ave.

Contact Mike Wynn at mwynn@winchestersun.com

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