BLUE MEDICINE BALLS
Here is what small town thinking and leadership gets you; gibberish presented as facts. When it comes to the medical ‘insurance’ provided to Lake Geneva employees that’s exactly what the brokerage firm of Cottingham and Butler are giving the leadership of Lake Geneva. The new sales plan presented by this Iowa firm outlines how to save the city money on its current ridiculous self-insured plan. There is not one whit of actuarial data anyone reading the report can grasp to make a decision about anything, yet the city council is being asked to diminish current rolls of employees they currently insure and then charge the remainder higher amounts of money.
There are some very basic facts being omitted by this strangely distant brokerage firm.
First: no group should ever self-insure if it is comprised of less than a thousand employees. There are simply not enough available liquid assets to pay claims in the the event of a medical disaster occurring to the premium reserves.
Second: a regular insurance policy should be maintained even in a self-insured plan for what are called ‘shock losses.’ Those are multi-million dollar losses that can’t be predicted for things like chemo, pre-natal and heart transplant kinds of events.
Third: the true figures necessary for calculations about what premiums should be charged for the plan have to be based on a claims to premium collection ratio. How much is collected every year and how much is paid out. Inclusion of shock losses should have notations for that or be excluded if a larger insurer assumes those risks.
None of this information is included in the recent report provided by this distant brokerage firm. There are also plenty of local brokerage firms available to provide medical insurance coverage. One of those should be selected so immediate and physically present representation can be available. Instead of dealing with real data, and making real decisions based upon that data, that city council in Lake Geneva on Monday night was asked instead to simply make the employees responsible for it all. In other words, hurt those wonderfully compliant and talented people. Lake Geneva, comparatively to other small towns all over, runs like a quiet well-oiled watch.
The big fear in the future was the presentation about a “Cadillac” tax to be assessed for plans that are to be deemed too generous to special employees. That Obamacare legislation, long delayed is written for the prevention of special plans that pay one hundred percent of all medical costs for certain high classes of employees over others. But the fear of its implementation in 2020 was inflated to the point where changes (employees pay more right now) must be made right away to comply with a rule that may never be put into effect (it was supposed to go into effect years ago). What a bunch of big city poppycock the whole presentation affair over employee medical was.
It was almost laughable, but not for the employees of Lake Geneva who have to feel diminished just by being considered for higher deductions. Does no one in city government see their real value? Certainly not Alderperson Bob Kordus who stepped right in to recommend an immediate fifteen percent increase, and then stressed getting rid of all those extra dependents some employees may have too many of. The City of Lake Geneva needs a regular insurance policy for its employees and it needs a local brokerage firm to sell and represent that policy. In order to encourage a decent rate structure be provided by this insurance company the city needs to figure out its premium to claim ratio, note and deal with shock losses, annotate continuing medical payments that will flow over and then have this new broker look at competitive bids it goes out for. Lake Geneva needs to stop having the wool pulled over its eyes by city slickers and supported by clueless cold-hearted and self-aggrandizing leaders like Bob Kordus.