Changes in future for Lake County health plan to fight rising costs

Lake County officials will be look at ways to strengthen county employee’s health self-insurance plan as rising costs threaten the program’s future solvency.

Commission President Michael Repay, D-Hammond, said costs have been trending higher for several years now.

“We are aware of it, and we have been contemplating potential solutions,” Repay said.

Some of the reasons for the spike in annual costs for the county could be due to delayed care because of the pandemic.

“We’re not entirely sure,” Repay said.

Screenings and even care appointments were difficult to schedule during the pandemic and that may have led to an escalation of conditions thus requiring more advanced, and costly, treatment.

Repay said this year’s numbers so far seem to show the increasing costs over the past two years may be continuing. He said officials will be asking their health plan consultant to provide recommendations on how costs can be cut to keep the program sustainable.

The county is no stranger to struggles with health insurance costs. Back in 2012 county officials found themselves in an unsustainable position as its self-insurance pool teetered on bankruptcy. In some cases, claims payments were at 120 days or more, with some so delinquent workers were being sent to collections.

Beginning in 2013 the county increased its per-employee contribution to the pool to about $17,810 a year, up from about $15,210, a move at the time that brought another $3.5 million per year to the pool. That figure has continually risen. The 2024 annual per-employee contribution is budgeted for $27,800.

Council members at the time also changed eligibility for insurance to full-time employees working 35 hours per week or more.

One of the ways officials dealt with the prior insurance crisis was by creating a new insurance plan under which new county employees were enrolled. Existing employees were given the opportunity to migrate to the new plan, though some did not. Repay said if they do begin a new plan, more effort would be spent migrating workers.

The changes helped to stabilize the program. Repay said the funding did well for a number of years and then has been up and down since about 2017.

Scott Schmal, the council’s financial administrator, warned the council during budget a Tuesday budget session that while there are funds to cover the insurance plan in 2024, the path the plan currently is on is “unsustainable.”

The self-insurance pool is underfunded, and costs continue to rise. One contributing factor is the employee contribution to the plan falls below the national average. Currently employees contribute about 5% to the plan cost annually. The national average is 20%, he said.

Repay said officials will have to look at a number of things as they consider the insurance plan moving forward. Employee contributions could be one of them. Council members have expressed concern they do not want to see any salary increase provided to employees eaten up by increased insurance costs as they try to make the county’s salaries more competitive.

He said Schmal knows the employee contribution is not adequate and “is not afraid to say it out loud to the people he needs to say it to. That is the truth. That is the fact of the matter,” he said.

Still, bringing employee contributions more in line with national averages may not be enough to shore things up. Repay said officials are going to have to take a hard look at insurance services as they move forward.

“We really need to do a complete approach,” Repay said.

cnapoleon@chicagotribune.com