Near doubling of health premiums is likely for 60,000 state workers

November 17, 1993|By John W. Frece | John W. Frece,Maryland Department of Budget and Fiscal PlanningStaff Writer

Because of erroneous information in a state announcement, an article in yesterday's editions about the new premium schedule for state employees' health insurance incorrectly stated the deadline for the filing of forms by employees who wish to change plans.

The forms must be in by Dec. 8, the end of the open enrollment period. Open enrollment beings Monday. State agencies must return the enrollment forms to the Health Benefits Unit of the Department of Budget and Fiscal Planning by Dec. 10.

The Sun regrets the errors.

About 60,000 state employees and retirees would have to pay nearly twice as much to keep their current health insurance coverage next year under a plan unveiled by state budget officials yesterday.

FOR THE RECORD - CORRECTION

Under the proposal, those who subscribe to the Preferred Provider Network (PPN) option, about two-thirds of state workers, would see their premiums rise from 91 percent (for a family of three or more) to 97 percent (for single people).

For example, a single employee who paid $22.54 a month this year under the PPN program would pay $44.36 per month next year.

"These are very steep increases, but less than what was first announced," said Charles L. Benton Jr., the secretary of budget and fiscal planning.

A month ago, the Department of Personnel proposed a fivefold )) boost in the premiums for the PPN program, an increase now believed to have been part of a plan to cover a secretly growing deficit within the overall state health insurance program.

Gov. William Donald Schaefer halted that original increase and ordered Mr. Benton to take over administration of the insurance program and develop a new plan.

Mr. Benton said the new set of premiums is designed to cover only the anticipated cost of claims, not related deficits.

Premiums also are scheduled to go up half a percent to 13.5 percent for most health maintenance organizations and for "point of service"plans.

Brochures explaining each program and the new rates are to be mailed to all employees between Nov. 21 and 24.

An "open enrollment" period has been hastily scheduled for Nov. 22 to Dec. 8. Employees wishing to switch to another insurance option must submit enrollment forms by Dec. 10.

Federal law requires employees who want part of their salaries set aside before taxes to cover health insurance must set up those accounts before Jan. 1, Mr. Benton said.

Representatives of state employee unions said many workers will have difficulty paying higher premiums.

"Had we not heard about the [original] 500 percent increase," the 90 percent increase "would have been outrageous," said Sue Esty of Council 92 of the American Federation of State, County and Municipal Employees. "It just seems like the sins of poor management are being visited on workers."

John F. X. O'Brien, executive director of the Maryland Classified Employees Association, said state workers should be given at least a 5 percent pay raise to help cover the higher premiums.

"Over the last three years, the cost of living has gone up more than 10 percent," Mr. O'Brien said. "Most state employees have had no raise whatsoever, in addition to giving up furlough days, working longer hours, and now paying higher premiums. That is unfair."

Mr. Benton said yesterday that Mr. Schaefer hopes to include a 3 percent raise in next year's budget, the first most state employees will have had in four years.

HEALTH INSURANCE PREMIUMS

This chart shows the health insurance premium state employees pay now for a family of three and the premium they would pay in 1994. Premiums for the Preferred Provider Network, which provides coverage for about two-thirds of the state work force, would almost double.

.. .. .. .. .. .. .. 1993 .. .. 1994 .. .. Pct.

Insurance plan .. .. Premium .. Premium .. Change

PPN (most popular) . 53.29 . .. $101.76 .. +91.0

GW/Chesapeake ... .. 51.15 . .. 55.19 . ... +7.9

Health+ ... .. .. .. 46.50 . .. 49.42 . ... +6.3

Kaiser/Perm .. .. .. 52.19 . .. 54.75 . ... +4.9

Prudential ... .. .. 57.04 . .. 64.73 . .. +13.5

Columbia/FS .. .. .. 52.24 . .. 55.02 . ... +5.3

MD-IPA . .. .. .. .. 52.58 . .. 56.87 . ... +8.2

Group Health ... .. 57.04 . .. 54.69 . ... -4.1

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