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Medical cost surge alarms school officials An insurance change prompts a flurry of last-minute claims in the Medford School District By DAMIAN MANN Mail Tribune Insurance costs for Medford schools jumped 16.9 percent last year, and that alarms officials hoping to curb soaring medical expenses. Superintendent Steve Wisely hopes the rise in claims can be attributed to employees' worries about last year's changeover in their insurance coverage. "While they were still on the HMO, people were concerned that their insurance might be reduced substantially," he said. After Regence BlueCross BlueShield of Oregon dropped its HMO coverage in Jackson County, Medford schools had to pay $1.8 million more for new coverage, pushing insurance costs to about 10 percent of the district's annual $80 million budget. Under the new plan, the district agreed to pay all costs for the insurance program for the first two years, but placed a 7 percent cap on usage increases in 2003-04. Individual employees would have to pay anything above the 7 percent cap. The plan also would establish a reserve fund that could be used to offset extra charges in 2003-04 and beyond. But the money for that reserve fund would be generated only if the increase for 2000-2001 was less than 9 percent. That didn't happen. "Consequently there were no savings," said Wisely. In reviewing claims, the district discovered claims grew 30.2 percent in the six months leading up to the July 1, 2001 startup of the new insurance plan. The previous six months had shown only a 5.4 percent increase. For the full year, that meant a 16.9 percent increase. "This was the time when the fear of a new insurance plan and the difficult negotiations between the district and the MEA (Medford Education Association) were going on," Wisely said of the six-month period with the big increase in claims. District officials hope that now the new plan is in place, fear has subsided and the smaller increases will be closer to the norm. Negotiations over the new health insurance plan are not finished. Teachers rejected the new insurance package in 2001, setting the stage for arbitration on June 6 and 7. For the district the cost of insurance increased from $6.85 million in 2000 to $7.96 million in 2001. While a 16.9 percent increase in claims filed appears high, Rollin Hogge of Rogue Valley Insurance said many smaller companies are seeing even higher rates. "We just have an area where there is high utilization," said Hogge, who handles insurance matters for Medford schools. The problem for Medford and local companies is that they could end up paying more for insurance if underwriters see large spikes in claims, he said. Reach reporter Damian Mann at 776-4476, or e-mail [email protected] Mail Tribune Home | Ottaway Newspapers, Inc. | Dow Jones & Co., Inc. | Privacy | Contact Us Copyright � 2001 Mail Tribune, Inc.