School board searches for new carrier due to high costs

Insurance premiums skyrocket, force decision

In what John “Jay” Robichaux says could be the “biggest decision” the school board will make since he has been a member, the insurance committee has begun looking at other healthcare providers as possible alternatives to UnitedHealthcare.

The committee members seemed in agreement that it has nothing to do with UnitedHealthcare’s service, but instead the escalating premium costs.

“Over the past nine years, we have seen our premiums race from $5 million a year to $15 million a year,” board member Stephen Crovetto said. “We cannot continue to take $1.6 to $2 million hits a year, even though it’s justified. We just can’t. If we can go out on the open market and get somebody to come down, even if it’s just for one year, we put our finger in the dike a little bit.”

UnitedHealthcare has served the school district for 13 of the last 14 years.

Glen Golemi, CEO of UnitedHealthcare’s Gulf States Region, which includes Louisiana, Alabama and Mississippi, says that the school board’s premium increase of 7 percent a year is well below the average.

“We see trends in our industry and local market of increases of 10, 12 and 13 percent each and every year,” Golemi said. “You’ve been averaging less than that because your range is 7 percent. You are at a 27 percent range, at a minimum, and sometimes even 40 percent lower than what your school board partners are doing that are with the Office of Group Benefits.”

Golemi says those increases occur because the population is aging and technology continues to advance, keeping residents alive longer. He also said that prescription drugs are the largest single component of healthcare trends, and that is something that UnitedHealthcare can’t control.

Still, Crovetto says that those costs add up, and the school board won’t be able to afford it for much longer.

“Before any of us get off the board, our healthcare could be $25 to $30 million a year,” he said. “In a $100 million budget, that’s 30 percent of your budget going strictly to healthcare for our employees. I think the mindset of the board was that this year we wanted to get a very competitive bid.

“The bottom line is costs.”

One of the two companies the board is looking at is Humana, which is a Fortune 150 company with a medical membership of more than 11 million. The company says that its integrated guidance solution achieves cost savings by linking product design, financial support, clinical programs and consumer education. It would cost $15,055,273 for the board to go with Humana, which is $611,869 less than UnitedHealthcare would charge next year.

The other company, Coventry, supports 4.2 million health members across the country. 32,500 of those are employer group customers. Coventry has more than 485,000 provider locations nationally, operating in almost every county or parish in the country.

Coventry would offer the same services that UnitedHealthcare currently offers the school district for $15,162,483. That total is $504,659 less than UnitedHealthcare’s projected rate for the upcoming year.

All of the totals are more than the $14,862,552 that the school currently pays for its insurance. However, the increase in premium costs from UnitedHealthcare forced the school board to look at other options.

Board Member Dennis Naquin said that the employees that were surveyed by the school all wanted to keep UnitedHealthcare, even if it meant paying for the increase themselves.