The high cost of health

City officials met Wednesday with their insurance consultants to discuss what they are going to do about a 41 percent increase in health insurance costs they caught wind of recently. Those extra costs will probably eat up the remaining $500,000 in the contingency funds for fiscal year 2007, Finance Director Bill Harrison said Monday. During the budget meeting in August, council allocated about $300,000 to new police and fire positions and a future teen center.

Photo by QUENTIN ROUX, Eagle staff

From prescription drugs to modern medical techniques, the price of health care is going up for employers.

“What we’re doing on all of these different options is looking at the effect on the premiums to be paid,” Harrison said. “We need to consider ... what share of those premiums the city is going to pick up, what share is going to be passed to the employees and if we will institute cost-savings measures to bring down the cost of the premium increase.”

Staff will begin working on a recommendation for council to be put on one of the agendas for October, he said.

Councilor Ted Forcht said the increase seems about average and the city will just have to find a way to accommodate it.

“It’s just the times that we live in,” he said. “People were talking about when we had to raise the water rates and everything and that’s part of what goes into it. We have enough trouble trying to attract people as it is and without the benefit structure we have, it would be difficult to get anyone on board. Contingency funds are there for unexpected expenses and things ... . We have a real commitment not to raise the property taxes for the full-time residents on Marco.”

Health insurance costs are subject to the charter-imposed spending cap, which allows only a three percent annual increase in the city’s budget plus the federal cost-of-living allowance. The raise could endanger funds for unexpected repairs, said Chairwoman Terri DiSciullo.

“It wiped out our contingency fund, so if we have something like an outfall that collapses ... that’s money that we would have used to repair something like that,” she said. “It’s not like we can just pay those increased costs and just keep everything else the same ... If it’s something in the everyday wear and tear for infrastructure, then we have to go to our operating budget.”

Which means, she continued, that councilors would have to find a way to reprioritize projects to accommodate that repair.

“But it’s one of those things. It’s very hard to control these insurance costs now,” she said. “It’s just a balancing act, I guess.”