Health insurance hikes hit paychecks Jan. 1

Brace yourself and your personal budget. Major increases in your medical and dental insurance premiums will take effect in exactly 60 days, which means your net take-home pay will shrink beginning Jan. 10.

Why? There are two reasons. First, due to a downturn in the economy, the state is facing a $2 billion economic deficit and has to make cuts to balance the budget. Second, medical/dental costs nationally have “skyrocketed,” according to Washington’s Health Care Authority, with increases up to 30 percent in some states. The brunt of that increase is said to be due to increased use and cost of pharmaceuticals. HCA has reported that on average premium bids came in 20 percent higher than last year.

For many years, state employees have been paying a tiny fraction of their insurance, with the remainder subsidized by the state. In fact, many state employees currently pay nothing. This year, state tax revenues paid for 92 percent of the insurance premiums for state employees. Next year, that portion will drop to 86 percent or $652 million, with workers paying the remaining 14 percent.

In short, the Legislature has begun following a nationwide trend in which state governments are paying a smaller portion of public employees’ insurance premiums.

For higher education, this marks a second financial hit, as the state has been cutting its overall support to higher education for the past 10 years.

President V. Lane Rawlins, during his recent President’s Address, pointed to the negative impact of higher health insurance costs, cuts in state funding, and the elimination of universitywide pay increases in 2002 – 03. “Virtually everyone in the university deserves a healthy salary increase,” Rawlins said, including faculty and staff. “If we don’t get funding for salary increases during this next legislative session, we may have to dig deeper into our own pockets and reallocate our resource.

“Our people work hard, and I think we get as much out of our bucks as anybody else in the country, but the problem is, there just aren’t enough bucks.”

Rawlins said he is “cautiously optimistic” that the Legislature will provide additional support to higher education next year.

Steps to take now
WSU employees have from now until Nov. 30 to review the available medical and dental insurance plans offered in their region, make a selection and notify the Washington State Health Care Authority. Two key steps in selecting or changing health insurance providers are:

• Determine whether your physician will be participating in that insurance program next year.
• Compare medical and dental coverage policies — rates, copays, referral processes, what counties they are available in, and the choice of specialists, hospitals and pharmacies.

Gone and merged
A few notable changes have occurred that affect entire provider programs.

Aetna U.S. Healthcare Inc. will no longer be available.
Community Health Plan of Washington will not accept new members except those members already in the plan who add dependents for 2003.
• Premera Blue Cross has consolidated Premera BC/HealthPlus and Premera BC/MSC into a new product, Premera Blue Cross/Foundation. If you are currently enrolled in one of these plans, you will automatically be enrolled in Premera Blue Cross/Foundation unless you select a different plan. For more information, contact Premera.
• Clarification: The Group Health Cooperative plan still requires the selection of a primary care provider (PCP), who then would make referrals to a specialist. For those who want the ability to self-refer to a specialist, Group Health offers its Options Plan.

Positive changes
Despite rate increases, there are a few improvements in benefits this year.

• Long-term disability coverage now offers a salary replacement of 60 percent of the first $400 of lost wages, up from $300, meaning the disabled employee can collect up to $240 (increased from $180).
• Part A Basic employee life insurance benefits increase from $15,000 to $25,000. There are no increases in the premium for these enhanced benefits.
• The optional term life and accidental death and dismemberment insurance premiums are decreasing in 2003.
• The Uniform Medical Plan will now implement standard coordination of benefits with other group coverage, so that between the two plans, covered services may be reimbursed up to 100% of the allowable charges after meeting the deductible costs.

For a complete comparison of rates and plans, go to www.wa.gov/hca/pebb.htm.

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