Archive for the ‘health care’ Category
April 15, 2014
OPEB-City of Memphis vs. Shelby County and MCS vs. Old Shelby County Schools
This is a very interesting subject and shows how badly the City of Memphis has been run, both the school systems and the general administration.
A) Shelby County CAFR from 2013 showing an unfunded liability of $306 million. DOWN $13 million from 2008 to 2013.
B) Shelby County CAFR from 2008 showing an unfunded liability of $319 million.
C) City of Memphis CAFR 2008 showing an unfunded liability of $857 million.
D) City of Memphis CAFR 2013 showing an unfunded liability of $1.29 billion dollars. UP $433 million from 2008 to 2013.
E) Old Shelby County Board of Education 2011 showing an unfunded liability of $334 million (June 2010)
F) City of Memphis Board of Education 2011 showing an unfunded liability of $1.16 billion dollars.
So it is obvious that Shelby County has been much better run than the City of Memphis and congratulations to past Shelby County (more…)
April 7, 2014
What Memphis Must Do
We are coming down to crunch time at the City of Memphis concerning the 2015 budget. I have researched and written on the City finances ad nauseum. Now is decision time. Do we kick the can down the road (the past favorite for many years) or step up to the plate?
Shelby County is the model for what should have been done in past years. However the leadership from the past and present city mayors and city councils has been abysmal. Too many people on the pension rolls (remember the January 2001 pension resolution which gave pensions to elected and appointed people with just 12 years of service regardless of age), too many people on retiree health care, too many people with line of duty disabilities, too many people on the payroll, too many days not working due to excessive sick days, vacations and paid days off. The county and the city have much the same governmental formats (except in the case of line of duty disability) but in the past, the county just made the hard unpopular decisions and had a clear vision of what future costs would be. The City’s vision was the next election, not future cost control.
Here is what must be done at The City. Health care reform for active and retired employees by lowering the city’s costs dramatically. Pension reform by going to a defined contribution plan for all unvested employees. Turn line of duty disability (more…)
March 31, 2014
Comparison of City of Memphis Health Care Cost to Obamacare
It is fascinating to watch the Affordable Care Act (Obamacare) deadlines pass, the specific provisions of the law get changed and the media spin go round and round. I decided to look at the current City of Memphis health care costs and compare it with Obamacare bronze, silver, gold,Platinum and catastrophic health plans.
First the City of Memphis three plans, Basic, Premier and Value plans.
Plan Type Annual Cost to Employee Annual Cost to Taxpayers
Basic single $1944 $6480
Basic Plan family $4127 $13757
Premier single $2109 $7030
Premier family $4260 $14201
Value Plan single $1008 $3360
Value Plan family $3540 $11800
Annual Deductible In Network
Basic Plan Single $350
Basic Plan Family $1050
Premier Plan Single $100
Premier Plan Family $300
Value Plan Single $1500
Value Plan Family $3000
Co-Insurance Hospital and Other Services
Basic Plan 10% You, 90% Plan
Premier Plan 0% You, 100% Plan
Value Plan 30% You, 70% Plan
Annual Out Of Pocket Maximum
Basic Plan Sgl $1500, Family $3000
Premier Plan Nothing
Value Plan Sgl $3000, Family $6000
Office Visit and Hospital
Basic Plan- (Primary Care Physician (PCP) and Specialist, 10% after deductible, Plan 90%)
Premier Plan- ($20 for PCP, $40 Specialist + deductible, Plan 100%)
Value Plan- (30% after deductible, Plan 70%)
There are other items as shown on the attached sheet but these are the major items. These look like good deals for City employees but depending on income, some may do better on Obamacare.
Now as to Obamacare, it is very difficult to get comparable figures because they do not want you to know until you submit all your (more…)
March 24, 2014
Health Care At Local Public Employers Under Obamacare
There was a fascinating presentation last Tuesday at the City of Memphis Executive Committee meeting. Shea Flinn introduced Stuart Collier of Collier Insurance who introduced Eric Hellman of Continuous Health.
Mr. Hellman’s presentation sought to explain Obamacare’s effect on health care and particularly its possible effect on health care costs for the City of Memphis and by the same token, Shelby County and the MLGW. It was a well done presentation and you can see his power point presentation here and also you can go to the City of Memphis website and see and hear the videotaped presentation (http://memphis.granicus.com/MediaPlayer.php?view_id=6&clip_id=4157).
It was long but very informative. What I got out of what he was saying is that the Affordable Care Act (Obamacare) opens up the possibility of reducing cost for the City of Memphis by letting lower paid employees go to the state exchanges to get subsidized coverage. That means the taxpayers, nationwide, will pick up part of our heath care cost.
There are four main points in Obamacare as it was originally signed. (Of course it changes day to day with executive orders).
- All employees working 30 hours per week or more must be covered.
- The coverage provided must be affordable. Affordable means it must pay at least 60% of the average medical costs of what the Department of Health and Human Services determines to be a standard population.
- Obamacare limits the amount an employee can be required to pay towards the annual health insurance premium to 9.5% of the employee’s household income.
- Obamacare requires coverage to be affordable and for those employees whose annual income is less than 400% of the Federal Poverty Level, Obamacare provides a federal tax credit to partially subsidize the purchase of insurance in a public exchange. This translates to individuals with incomes up to $44,680 and to families of four with incomes up to $92,200.
Confused? What a monster these DC politicians have created. However I think Collier and Hellman should be hired to present their (more…)
February 25, 2014
As I was reviewing information from the County concerning the new 2014 healthcare rates for active employees I came across a listing for rates for 10 month employees. I asked about this and they told me that these were the employees for the Shelby County Head Start Program. I remembered the proposed 1/2% sales tax proposal for the City for a pre K type program which failed to get the votes. However I did not know about the County program. I asked how many employees were involved, what did it cost and who was paying.
The County is great and fully transparent about answering questions in contrast to the City of Memphis, the old Memphis School System and the new Shelby County School system.
Well here are some details. The Executive Director is John Lovelace and he is paid a salary of $116,471.00 per year. According to (more…)
February 20, 2014
Health Care For Public Retirees
This is another huge cost area for which the taxpayers are paying. You are paying 70% of the health care cost for City of Memphis and Shelby County retirees and 75% of the cost for MLGW retirees. The bills come each year for medical care for retirees and their families and the current annual bills are paid by the City, County and the MLGW as they occur.
But like pension liability, there is a future cost liability that is supposed to be taken care of by the OPEB funds (Other Post Employment Benefits), mainly future health care costs and life insurance for retirees). This is where the problem lies, mainly with the City of Memphis, and to a lesser extent with the MLGW and Shelby County.
The unfunded OPEB liability for the City of Memphis is $1.29 billion dollars. For the MLGW it is $420 million and for Shelby (more…)
February 11, 2014
As if Obamacare is not bad enough, trying to compare local health care rates is not easy. But I will make an attempt to compare the active employee rates and the cost to you the taxpayers for the City of Memphis, the County and the MLGW. Here we go.
First you have to look at the plans available in 2014.
The City of Memphis has three options: Premier, Basic and Value plans. Attached is a brief overview. The prices shown in red are what the employee pays twice a month or 24 times per year. This is the 30%. You, the taxpayer, pays the 70%.
The Basic family plan costs the employee $4127 per year. It costs you the taxpayer (70% of total cost) $9630 per year. It’s total cost is $13757 per year.
The Basic plan covering the employee only costs the employee $1944 per year. It costs you the taxpayer (70% of total cost) $4536 per year. It’s total cost is $6480 per year.
February 6, 2014
In reading through the Strategic Fiscal and Management Plan for the City of Memphis I keep finding things that amaze me as to the past fiscal mismanagement. It is quite clear that the City is supposed to pay 70% of the health care premiums and the employee is supposed to pay 30%. Look at the attached pages 46 through 49 of the plan. On page 46 the employees paid as low as 23.1% and as high as 26.9%. This cost you, the taxpayers, $9.2 million dollars over these three years. I presume the same was true for the OPEB retirees but I am checking. $9 million here, $5 million there and pretty soon you are talking about real money. On top of this mistake by the City, here is what the report says about the history and direction of health care cost, a huge part of the money problem.
On a fiscal year basis, from FY2008 to FY2012, the City’s General Fund contributions to the Basic and (more…)
January 23, 2014
More Info From the Memphis CAFR
Pick up the CA and you will get more articles than you can read over your morning coffee. They all point to the upcoming decisions of the Mayor and the City Council. The chickens are coming home to roost as they have been disturbed by the noise of the cans that have been kicked down the road.
As I sift through the current 2013 Comprehensive Annual Financial Report (CAFR) of the City of Memphis, I decided to compare several pages from the 2008 CAFR with the same pages from the 2013 CAFR.
December 30, 2013
What’s New for 2014?
Well the affordable care act (known generally as Obamacare) is going to be on everyone’s mind. On my mind for some time has been the question of how it would affect the already high health care costs of the City of Memphis, Shelby County and the MLGW. This is a big subject and I will take on first the City of Memphis. I finally got their new rates and information for active employees. Here is the information and here is the statement about the new plan and rates.
1) City of Memphis plans are no longer considered Grandfathered under healthcare reform
2) Pre-Existing Condition Limits no longer apply to anyone regardless of age
3) Dependents covered to age 26 even if the child has access to his/her own employer coverage.
4) All copayments, coinsurances and deductibles now apply toward the Out of Pocket (OOP) Maximum
5) Coverage for Clinical Trials
6) Additional guidance for Women’s Preventive Health/Contraceptive Coverage – No Cost Share
7) Vitamin D Coverage for prevention of falls in older adults
8) Medical Plans – Employee contribution increased to 30%
9) Increase in dental premiums
10) Increase to ER Copay – Medical Premier Plan Only
11) A third medical plan option – the Value Plan
12) Notarized documents no longer required; instead you must provide your Oracle employee ID number
(located on your ID Badge or your paycheck stub) along with your signature.
Obamacare has arrived, whether you like it or not, and the costs have been driven up about 16.8%. The City of Memphis is self insured and pays all the medical costs but an insurance company handles the paperwork.
The following is the conclusions of Mercer (a city hired health care consultant) in a report dated April 23, 2013) on the impact of Health Care Reform on the City of Memphis.
- Cost could increase annually by $7.6 million if all of the current waivers enroll in the plan.
- Excise tax for 2018 is $477,000 dollars and will accumulate to $50 million over the following 10 years.
- If the affordability test was based on dependent coverage contributions, City of Memphis could pay a penalty for up to 25% of their population.
- Transitional Reinsurance fee will cost the City of Memphis about $1.4 million starting 2014.
Here is a brief recap of the new rates. This is the total annual cost with the City paying 70% and the employee paying 30%.
- Premier Plan for a single $6,015.20
- Premier Plan for a family $14,201.60
- Basic Plan for a single $5,544.00
- Basic Plan for a family $13,757.60
- Value Plan for a single $3,360.00
- Value Plan for a family $11,800.00
How does this compare with what you will pay in 2014 if you know? You will have to look at the details of the plan which I have attached above. There is much more to explain but this is the first dose of the new health care landscape.