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Health insurance premiums rise at Mission CISD

Mission Schools made a big move to reduce its health insurance deficit — an issue looming over the district for two-plus years. But with the plan design changes and increases in employee and employer contributions, district leaders hope this will finally keep MCISD in the black. 

DEFICIT HISTORY

Since 2021, Mission CISD’s self-funded health insurance fund has hovered around a $1 million deficit because of a few high-cost claimants. At one point, 11 claimants made up 54% of the district’s medical expenditures out of 2100 employees subscribed to the plan. 

But this problem is not unique to Mission CISD. Industry experts have been warning self-insured businesses about the rising costs since 2020. 

“We knew. The health professionals told us because of the pandemic, most individuals did not go to their three-month appointments, six-month appointments, yearly appointments. Why? Because they did not want to get sick,” Superintendent Dr. Carol Perez said. “Therefore they told us, ‘Brace yourselves for the next three to five or six years because you’re going to have high claimants, you’re going to have high claims because some individuals that did not take care of themselves, did not do preventative care are going to cost [you.]’ So we’re doing a lot of things with wellness…to overcome this.”

In the last two years, Mission CISD changed the pharmacy formulary to save on prescription costs, held wellness events, hosted clinics and partnered with a local gym to promote preventative care. Despite implementing several short-term strategies to improve the fluctuating net position, Mission CISD has not been able to dig itself out of the hole. 

Graph of Mission CISD’s 2023 payroll deduction increases – courtesy of Mission CISD

However, district leaders also knew that to see real change in the numbers, they would have to make overall changes to the insurance plan and premiums. 

INCREASES

Claims make up the largest part of MCISD’s health insurance budget. So, the first line of defense to control the claims is to adjust the plan design. 

This year is the first time the district altered the plan design since switching to self-funded health insurance in 2014. Carlisle Insurance Consultant Valeria Ybarra explained the plan adjustments at the July 19 board of trustees meeting. 

Mission CISD has three plans — high deductible, base plan and high plan. All three changed to include deductible increases, out-of-pocket maximum increases and specific copay increases. With the adjustments, the district could save an estimated $1,259,064 from the maximum-expected claims between Oct. 1 and June 30, 2024. 

In addition to plan design changes, the district increased employee and employer contributions to the insurance fund. District contribution increased by 20.11%; employee payroll deductions increased by 10%. The last and only time the district increased the employee payroll deduction for self-funded health insurance was in 2019. However, Mission CISD increased the employer contribution in 2019, 2021 and 2022. 

The payroll deduction depends on the individual employee plan, and if it covers family members. The more people on the plan, the higher the cost. 

Ybarra said most Mission CISD insurance subscribers utilize the employee-only high-deductible plan. So about half of the average 2088 subscribers will see a $2.55 monthly increase from last year. 

Those with the employee-only base plan will have a $3.99 monthly increase, and those with the employee-only high plan have a $10.40 monthly increase. But employee and family high plan subscribers will see the most change — a $104.12 monthly increase. 

“Typically the people that are on the high plan are the people that use it the most so it’s only fair that they pay more. But percentage-wise, it’s the same,” Deputy Superintendent of Support Services Lorena Garcia said. 

Despite the changes, the employer and employee contribution distribution will remain at 83% and 17%, respectively, so the district and employees absorb the increase together. 

Board President Roy Vela asked if these increases will finally get the district back on track. 

“Based on the last couple of years, we’ve been in the red. So with these plan changes…and with the changes to the pay structure with the increase on the employer contribution and the employee [deduction], do you think that’s it? Like we’re going to be in the black,” Vela asked Ybarra at the July 19 board meeting. “I say this because we’re doing everything we can…but we can’t go back and get back from Paul to pay Peter.” 

In short, Ybarra said yes. She explained that based on the stop loss contract and projections, this should bring the self-funded health insurance fund to the positive. 

“The stop loss contract is what is going to illustrate what’s expected and then the max expected in claims since that’s the biggest piece of your budget — the claims,” the insurance consultant said. “So hopefully this will help the district to catch up and stay in the black. I wouldn’t anticipate going in the red.” 

The board of trustees unanimously approved the changes to the self-funded health insurance plan design and the employer and employee premium increases. The new plan and 10% employee contributions begin Oct. 1, effective until Sept. 30, 2024. The district contribution of 20.11% is already in effect.

This article is part of a series on Mission CISD finances.

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