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County insurance lower than expected

One highlight of the budget is cost savings in employee insurance rates
Crook County Court approved their budget of $53,025,801 for the 2006-07 year Wednesday.
   One of this year's budgetary highlights is the exceptional cost savings in employee insurance rates.
   The county renewal rate, with the same benefits to its employees, came in at 16 one-hundredths of one percent. Their total health insurance bill for the year is just under $1.5 million.
   The trend for cost increase is around eight percent, said Crook County Judge Scott Cooper, with some employers facing increases in the double digits.
   "It's a tremendous savings to taxpayers to negotiate rates that small," he said. "This continues the trend for the county to get good rates."
   Cooper said insurance costs have increased an average of only 4.5 percent during the past six years.
   "The primary reason we've seen reduced coverage cost has to do with employees not over utilizing their health care benefits," he said. "Because we haven't used premiums excessively, we are able to maintain relatively flat rates."
   Chet Petersen is the agent of record for the county's Lifewise health insurance.
   He said for the past several years there has been an upward trend in health insurance costs of 11 to 16 percent a year. If that trend continued indefinitely, health insurance rates would double about every six years.
   Petersen was appointed county health insurance agent of record about seven years ago. He said the county was concerned their health insurance was going up at what they thought was an alarming rate. They analyzed which areas of the insurance policy were being used excessively and found emergency room visits accounted for eight percent of total claims, or 10 times the statistical average.
   Petersen and the county were able to address the issue with the message, "use your health care but don't abuse it." An example would be using the emergency room instead of scheduling a time to see your doctor.
   "All the employees need to be congratulated," Petersen said. "They have all been very cognizant. They don't abuse it and use it like they should."
   Petersen said he doesn't know of any other counties in Oregon with lower average cost increases than 4.5 percent.
   "We are really pleased," Cooper said. "It's a great savings to the taxpayers and continues to be a real opportunity for us to retain and attract quality employees."
   Petersen credits employee education, responsible employee usage and innovative thinking for the success of the plan.
   He cited the county's health reimbursement account as an example of this innovative thinking. The county chose to raise employee deductibles from $500 to $1,000, securing a better rate with the insurance company. However, if employees exceed the $500, the remaining $500 is paid out of the health reimbursement account, not the employee's pocket.
   "So there is not adverse effect on the employee," Petersen said.
   The county was also able to achieve a 2.3 percent decrease in property and liability insurance, instead of the eight percent increase they had budgeted for.
   Glenda Lyle of Prineville Insurance Agency is the agent working with the county and their larger insurance company.
   She said there are only two major insurance companies writing municipalities in the state of Oregon, so competition is minimal, but they are reducing rates because other factors are strong.
   Lyle said several factors impact insurance costs. The stock market, interest rates, and national catastrophes were all negatively effecting rates until recently.
   "The stock market is strong, interest rates have gone up and we haven't had a catastrophic type loss that has impacted the market," she said.
   Cooper said the savings will help the county maintain the ending general fund balance.
   "We're not the variety that says just because you save it you have to spend it," he said.
   Insurance rates must be renegotiated each year.
   Lyle is optimistic about next year's rates.
   "I would feel fairly certain without some huge national catastrophe our rates would go down or stay level," she said. "The industry is pretty positive right now. If things stay the same, we could see the county at the same level next year, or even go down again."