PAT Council reviews ideas to address rising cost of benefits at university

By Lori Wright, Media Relations

The PAT Council reviewed several benefit cost containment ideas being considered by the university system as USNH tries to achieve the planned $2.4 million cuts in medical benefits in order to contain the predicted growth of employer paid medical benefits for fiscal year 2005.

Some of the ideas include increasing co-pays for doctor’s visits and prescriptions, as well as using disease management and pharmacy discounts to lower the overall costs of benefits for the university system, which includes UNH, Plymouth State, Keene State and The College for Lifelong Learning.

According to information from the PAT System Personnel Policy Council (SPPC), USNH has asked for cost-savings ideas in order to limit the growth in employer medical costs to under 10 percent a year.

This goal comes from a March 2001 motion of the USNH Trustees’ Financial Affairs Committee, according to Joan Tambling, director of USNH Human Resources. The committee set a goal that medical benefits should grow by no more than 7.5 percent in calendar year 2004, and no more than 5 percent in calendar year 2005.

Taking into account an expected 15 percent increase in overall benefit costs in New Hampshire, $2.4 million is the amount USNH estimates it would have to cut costs from the projected 15 percent rate in order to achieve a growth of no more than an average of 6.2 percent (the 7.5 percent and the 5 percent combined) in fiscal year 2005, Tambling explained.

“We actually don’t know yet whether there is a shortfall or not. It could be much worse than $2.4 million,” Tambling said.

As a result the OS and PAT/EE SPPCs are weighing several cost-saving measures to achieve a $2.4 million savings. At the May PAT Council meeting, councilors reviewed more than a dozen ideas in order to gage how receptive the council was to each idea. Of the $2.4 million, the system has targeted medical plan design changes – adjusting co-pays – within the Cigna medical plans for $800,000 in savings.

“They have no other source of funding. That is what they are telling us. There is no kitty out there,” PAT Council Chair Phil Hammond said.

The current co-pay for a visit to a specialist or primary care physician is $10. The council was most receptive to increasing the payment for each to $15. The council was least receptive to increasing the specialist co-pay to $20.

UNH Cigna plan members currently pay $75 for an emergency room visit. The SPPC proposed increasing that to $100. The council unanimously turned down the idea, noting that the co-pay for an emergency room visit had increased from $50 to $75 last year, and if bumped up to $100, would represent a 100 percent increase in that fee in two years.

Similarly, a proposal to establish a high co-pay for in-patient and out-patient hospitalization was not supported by the council. Currently UNH Cigna plan members do not have a co-pay for hospitalization. The council did not support two proposals, one that would establish a co-pay of $200 for in-patient hospitalization and $100 for out-patient, and a second that would establish $200 for in-patient and $50 for out-patient with a $250/year cap.

“I don’t think a co-pay for hospitalization is a good idea at all because it’s a large expense at once,” Rep. Sonke Dornblut said.

Instead, the council added two proposals for consideration, which received near unanimous support: $50 in-patient co-pay and a $25 out-patient co-pay, or $100 in-patient co-pay and a $50 out-patient co-pay with a $250/year cap.

In terms of prescription drug co-pays, the council weighed the circumstances of people who suffer numerous illnesses who are using some of the newest drugs available and paying the highest co-pays because generic drugs are not available. Currently staff pay $5 for generic drugs, $15 for preferred brand drugs and $35 for brand. Some of the proposed ideas would increase the cost for brand drugs to $50 and preferred brand drugs to $25.

“I think some families just will not go to the doctor as often,” Rep. Pat Craig said.

The council unanimously favored increasing the co-pays to $7 for generic drugs, and $18 for preferred brand drugs, but not changing the $35 co-pay for brand.

The council also considered that UNH employees could see an increase in their monthly plan premiums, in addition to the increase in co-pays. Both the monthly employer and employee cost of medical plans as well as co-pays in certain areas have been increasing dramatically, a phenomenon seen nationwide.

None of the recommendations are binding and a final decision regarding how to make up a possible shortfall has not been finalized. The PAT/EE SPPC will meet again at the end of May to review the council’s thoughts about how to achieve the planned cost containment goals.

In other business related to benefits, Hammond announced that the SPPC had tabled until fall the family-friendly proposals, which would have expanded paid time off for new fathers and mothers, both natural birth and adoptive, and broadened the use of time off for family health emergencies.

Rep. Tracy Boyle said the move gives the PAT, Operating Staff and Extension Educator councils a chance to regroup and discuss the most desirable family-friendly benefits that they would like to see implemented.