COSA Drops Shannon, Which Will Drop ?

The City of San Angelo will drop Shannon Medical Center from its health insurance plan beginning January 1, 2012.  Of over 1,100 insured city employees, 70% currently use Shannon doctors and hospital services.  That means 770 must change doctors, primary care physicians and specialists, within 45 days or pay drastically higher out-of-pocket costs for out-of-network care.

The new plan will save the city $483,000 from the current plan.   How else did coverage change in the new plan?  The City didn't say or the Standard Times didn't report, but consider HR Manager's position on increases earlier this year:

Marley said renewal under the current plan design would require a 35% increase, 24% relative to the existing plan and 11% due to health reform requirements.  

What other coverage changes were needed to take a $2.5 million increase and turn it into a nearly $500,000 savings?  That $3 million swing likely required more than a single provider change. 

The other issue is what the city is doing with banked health insurance savings, over $1 million so far:

$190,000 from 192 people dropping health insurance in 2011.
$500,000 in expected Early Retiree Reimbursement Program funds
Some portion of $483,000 in savings from Aetna-Community move

The City didn't say who would file future ERRP claims, as the job is currently contracted to Blue Cross/Blue Shield.  This City Council proved inept in mobilizing ERRP money to help retirees keep affordable health insurance, especially in light of last year's position by city leaders:

One looming question after Tuesday’s extensive city health insurance plan debate — the topic took up much of Tuesday’s City Council meeting — was whether reimbursements from the Early Retiree Reinsurance Program were included in the plan’s $1 million cost increase.

The answer is no, and will likely remain that way until the end of 2011, when the city is discussing its health insurance plan for 2012.

The end of 2011 came and went.  The 2012 health insurance discussion went as I predicted, fast and furious with barely an effected employee in sight.  Who has vacation time to use to get stone-eared leaders to listen?  What happened to management by wandering around?  It became management by stomping on.

As for Shannon, the system will have 770 fewer patients to help cover the burden of the uninsured.  The City's move hurts the Mayor's chances of getting Shannon to contribute payments in lieu of taxes (PILOT funds). It may eventually hurt the area's employment picture as Shannon absorbs a $2.5 million hit from the city, along with another $2 million from Medicaid.  Shannon's UPL and DSH funds from the state and feds will be cut.  It's unknown how much. 

Will tax payments become a future requirement to bid on COSA health insurance?  One thing's for sure, as Shannon is pressed, life will be harder for the area's uninsureds.  The dumping is merely passed on.