$56,000 Insurance Error

Posted in September, 2013.

On July 22nd, 2013, the WGSD Board chose a health insurance carrier for the 2013-15 school years.  The (former) district administrator, recommended, and the Board approved, paying an additional $36,595 in the first year, and a projected $19,695 in the second year to stay with the WCA.  As a result, the additional cost to the District and employees to have the WCA as the insurance provider is $56,290 more than the teacher preferred WEA Trust. Please see the summary table, supporting documents, video of board discussion, and related information below.

Year WCA Renewal Rate WEA Trust Rate
2013-14 $165,229 x 12 months = $1,982,748 $162,179 x 12 months = $1,946,152
2014-15 With 7% max increase = $2,121,540 With 8% max increase = $2,101,844.76
Total $4,104,288 $4,047,997
Difference $56,290 more than WEA Trust

The Antithesis of Governor Walker’s Act 10
The recent teacher surveys (December 2012) indicate that the WGSD administration did not seek employee input regarding their preference in health insurance providers.  Why the District would pay over $50,000 more to stay with the employees second choice is difficult to comprehend.

Hearsay and the Prescription Drug Formulary
In his recommendation, the (former) district administrator,  explains that an employee’s out-of-pocket co-pay for prescription drugs could be higher if the District switches back to the WEA Trust. At 1:18 in the above video he states that when talking to other school Districts that went back to the WEA Trust he heard “…the prescription drug component of their insurance program hasn’t matched…”.

I inquired if the District’s insurance consultant, who will receive a $60,000 fee (1.5% of commission), had supplied any empirical data comparing the prescription drug costs (formulary) between the WCA and WEA Trust.   The District’s response was that no comparison had been made. Note that it is customary when comparing prescription drug plans to compare the top 50 or so most commonly prescribed drugs based on employee experience. Once this is done a meaningful conclusion can be made about employee co-pay contributions. What exactly did we pay this insurance consultant $60,000 for?

You Be the Judge: Comparing the WCA and WEA Trust
The WCA health plan is administered by UMR, owned by United Healthcare.
The WEA Trust is an independent Wisconsin business.

Both the WEA Trust and United Healthcare participated in the Consumer Assessment of Healthcare Providers and Systems program (CAHPS) that is designed to promote the assessment of consumers’ experiences with health care.  Click HERE to see how the WEA Trust and United Healthcare compare.

Supporting Documentation Received through a Public Records Request

This table was provided by WGSD through open records request. This table was prepared for the WGSD by an insurance broker that will receive a 1.5% commission fee, or $60,000.

July 22nd, 2013 Action Item determining the Health Insurance Carrier

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