Meridian Star

September 27, 2013

Council overrides mayor's veto

By Terri Ferguson Smith /
The Meridian Star

MERIDIAN —     Efforts by Mayor Percy Bland to change the health insurance plan for city employees failed on Thursday when the Meridian City Council voted 4-1 to override a veto by Bland that would have stopped the council from staying with the city's current policy.

    As it stands now, city employees and their families who are on the insurance plan will keep their health insurance with Fox-Everett. Voting in favor of overriding Bland's veto were Ward One Councilman George Thomas; Ward Two Councilman Dustin Markham; Ward Three Councilwoman Barbara Henson, and Ward Four Councilwoman Kim Houston.

    Ward Five Councilman Randy Hammon voted against the override. The 4-1 vote was the same as a vote taken last week by the council to keep the insurance with Fox-Everett.

    Bland, a proponent of switching to United Healthcare in order to save the city an estimated $280,000, issued a veto on Friday. To stop the veto, the council had to pass a motion to override by a two-thirds majority or by at least four votes.

    During budget work sessions in August, the council heard presentations from United Healthcare, Blue Cross Blue Shield, and Fox-Everett.

    Before the vote on Thursday, Bland asked the council to reconsider its opposition to switching to UHC. Bland said UHC put forth the best plan with a lower rate because it has negotiated with physicians, clinics and hospitals for lower reimbursement rates.

    "We are a self-insured entity in Meridian. What that means is, that's not United Healthcare's money, that's not Blue Cross's money, that is not Fox-Everett's money. That money comes from the coffers of the city," Bland said. "That money comes from city residents who pay their taxes. Fox-Everett never spends a dime of their own money. United Healthcare does not spend a dime of their own money. That's our money. They just serve as the claims administrator."

    During the past four years, according to figures provided by Bland, the city has paid approximately $3.4 million each year in claims. Bland said he doesn't expect the costs to go down. He said he was disappointed in the council's decision to stay with Fox-Everett, but he wasn't surprised.

    "It's a sad day for Meridian. We make decisions; I try to make decision off data. The data was in one company's favor. It could have saved us $300,000. We were down to three companies. They all are good companies. I think the company I put forward was the best company, United Healthcare," Bland said.

    Bland said the savings could have gone to other needed projects in the city. Some council members said they wanted to leave the insurance as it is because city employees like the policy.

     "It's hard being in leadership. It's not easy. But at the end of the day we can't make personal decisions based on feelings or emotion," Bland said. "None of these three companies are the health care provider. They are plan administrators. That is why it is so important that I keep saying that the money is the city's money going through a plan administrator on to the hospitals, or to the clinics. They are just providing a service of being a plan administrator. The plan is the city's plan. it was going to stay consistent no matter which three of those companies we used. I understand employees being happy. They could have been happy with the new company and we could have saved $300,000."

    During the meeting on Thursday, Bland asked if the council would agree to let UHC representative Stan Neese speak to the issues they were concerned about. After a terse back and forth exchange between Thomas and Bland, the council agreed to let Neese speak.

    "I have yet to see any city walk away from that kind of savings," Neese said.

    Neese said the company had already begun implementing the city's insurance to UHC, assuring the council again that there was time enough to get it done by Oct. 1. However, he cautioned that the prescription card program might be delayed a few days.

    ID cards could be in on Monday, the last day of September, Neese said.

    In a letter to the mayor last week, Neese wrote: "I also want to reiterate that the projected claims savings is not based on an assumed reduction in claims volume. The savings is based off of the city's current claims volume, that will now be paid based off of United Healthcare's provider contracts and not the current rented PPO network's contract."

    Following the vote, The Meridian Star asked each council member why they voted yes or no on keeping the current insurance.

    Thomas said the only difference in the policies was in the reimbursement rate to healthcare providers.

    "That's where the savings was. United Healthcare will reimburse at a lower rate than Fox-Everett. Employees have been happy with Fox-Everett, we do not know what claims will be in the next year," Thomas said. "In United Healthcare's presentation, there were some doctors that they said would not accept their plan. We have a good plan, it works, it will be less than it was last year as far as the administrative cost. You stay with what you've got. The only difference is in the proposed reimbursement to the healthcare providers. The policy, the plan, everything else would be exactly the same."

    Markham said he looked at various factors in making his decision.

    "We received the veto from the mayor and with the veto, there were some accompanying documents from United Healthcare that addressed some of the things that we had concerns about. Among those things were whether or not the policy would be in effect Oct.1. It would be in effect Oct. 1 but the pharmacy cards wouldn't work," Markham said. "Employee satisfaction is key. If you're happy with the policy, if you have peace of mind with that policy, you have to kind of support your employees in that regard. Transition was key to me. Here it is Sept. 26 with an effective date that is supposed to be Oct. 1. A two-business day window to get a plan for 550 plus employees up and ready to go. We have to look out for what's best for our employees."

    Henson said she had a lot of feedback from city employees who want to keep their current policy.

    "First of all, in the 24 years I've been on the council, I have never had so many emails and phone calls and visits from the people who are employed here who wanted us to keep what we had because they have not had problems with the insurance paying their claims," Henson said. "Yes, it is a few more dollars in expense to keep what we've got, but the people are satisfied with it. We did not enter into this lightly. We just voted our convictions on it."

    Houston said she was surprised Thursday to learn that UHC could still get the policy in effect by Oct. 1 and she was surprised that the company had already started implementing the plan.

    "I don't appreciate surprises," Houston said. "I would ask that the lines of communications within our local government will be open so that we can have sensible one on one conversations so everybody can be on the same page. I don't like making on the spot decisions."

    Houston said she will be happy to look at the city's benefits administrator again in June, 2014.

    Hammon was the only council member who wanted to change to UHC.

    "It's not just about the money. That's a great savings. Let's remember, just by bringing this up, we've already saved $140,000 with the other insurance carrier that had not given us a break in five years," Hammon said. "What it is about, is the insurance company that's going to get a 60 percent discount instead of 40 percent. That means that company is going to pressure the hospitals and doctors for lower rates; for fair rates. If we don't have somebody doing that for us, the cost is going to keep increasing. We need somebody to fight for us and in my opinion, this company that we had has not been doing that."