Medford school staff will pay more out of pocket under plan changes

Employees on the school district’s health insurance plan will be paying more out of their pockets in 2025.

How much more and how that will take place remains to be finalized with action expected to be taken at next month’s school board meeting.

Faced with an initial renewal rate increase of about 16% for Medford Area Public School District, school leaders are faced with the option of accepting the increase and passing along premium increases to employees, or making plan revisions including the addition of copays after the insurance deductibles are met which would reduce the premium increase to about 10% over last year.

On Monday, members of the Medford Area Public School District’s finance committee met with Cory Tothe-LaPointe, a senior benefit consultant with Spectrum Benefit Solutions, the district’s insurance broker, to review the two options.

According to Tothe-LaPointe, the increase is claims-driven with the district’s loss ratio at 108% for the 12-month period, meaning Security Health Plan paid out about 8% more in claims than it collected in premiums from the district in the past year. The district’s high loss ratio makes it unlikely the district would receive any better rate options if the district would go through the time and expense of asking for bids from other health insurance providers.

“There are no great options,” Tothe-Lapointe said.

The district’s 2024-2025 budget included a projection for up to a 10% increase in the insurance premiums. A higher rate increase would require additional cuts to be made elsewhere in the budget.

According to district administrator Laura Lundy, the district has the option of continuing with its current plan design or implementing co-pays. Under the co-pay option, after the deductible is met, individuals would have an additional $1,000 out of pocket and families would have an additional $2,000 out of pocket through a 10% copay charged on office visits, procedures or medications. Under the current plan, once the deductibles of $1,600 for single and $3,200 for family on the low deductible plan are met there are no other out of pocket costs. The district also offers employees a high deductible plan with a $5,500 deductible for individuals and a $11,000 deductible for families. The majority of school district employees are on the lower deductible plan with broader options allowing them to use both Marshfield Clinic and Aspirus facilities and medical providers.

Committee member John Zuleger noted that the copays effectively add $1,000 or $2,000 to the deductibles. Deml noted that with copays, it is stretched out more rather than being all up front.

Zueleger asked what would happen if they just increased the deductible. Tothe-Lapointe said they had looked at a straight deductible increase, but that it would only lower the premium increase to 14.9%.

Deml noted the point of copays is that is that if the person doesn’t use the insurance after the deductible is met, they don’t pay any more.

With insurance rates being driven by usage, the idea is that having to pay a 10% copay would make people reconsider going to healthcare providers for minor things, and especially in regard to emergency room visits.

According to Tothe-Lapointe, in the 12month period looked at for the rate renewals, there were 238 emergency room visits by district employees or their families.

“36 of those were needed,” she said, noting that 115 could have waited for a primary care visit and another 77 were nonemergency and could have gone to a walkin.

It was noted that Medford no longer has a walk-in clinic available in the community and committee members said people were frustrated with having to attempt to get a same-day appointment. Committee members stated that this is likely only to get worse with Aspirus Medford discontinuing offering birthing services here and the potential of having ambulance charges for transporting women in labor who come from Medford to Wausau.

“Have we looked at anything to to discourage them from going to the ER?” asked committee member Brian Hallgren. A suggestion was made for a higher copay just for emergency room visits.

“It would be more detrimental to employees,” said committee member Dave Fleegel. “You are only punishing those who need care,” he said.

There was also concern that by making people hesitant in getting care when something is relatively minor, it could end up costing a lot more down the road.

According to Lundy, the administration’s recommendation is to go with the option B with the new copays. This gets the premium increase closer to budget and is less expensive to the district overall.

The district is also looking at adjusting the health savings account contributions to soften the impact to employees, however, this was met with some opposition with Hallgren suggesting the district should freeze the HSA and look at potentially reducing the contribution in the future.

While the consensus of the committee was to go with the option which adds copays after the deductible is met, they held off in making a recommendation to go to the full board to check into if there would be an impact of keeping the copay dollar amounts the same but increasing the percentage from 10% to 20%, which would allow the maximum to be reached faster.

No formal action was taken and it will be brought to the October 28 board meeting.

In other business, committee members: • Discussed the potential to purchase or lease meal vending machines for in the high school to provide meal options. The idea would be that they could be used for students going to sporting events or activities to get a meal to take with them. The expense of purchasing the equipment could come out of the district’s food service funds balance. The district is limited by state and federal rules about what to do with the surplus of funds in that account. However, there is some concern about if machines would be used, with principal Jill Lybert saying that when similar things in the past were tried, they were not successful.

• Received a review of the district’s property, criminal, workers compensation and cyber security policies from John Gibson. He noted that there has been a spike in the size and cost of claims across the state and country which has especially driven up property insurance costs.

• Received word that the dental insurance premium with Delta Dental will go up 6%.