The city of Killeen is considering changing its health insurance provider, a move that would save city staff money for premium costs but decrease in-network coverage.
Blue Cross Blue Shield has been the city’s health insurance provider since October 2011, but with the implementation of the Affordable Care Act, the city changed the way it selects a provider.
After hiring a consulting firm to “navigate the waters,” officials are recommending a switch to Scott & White insurance.
Ann Farris, assistant city manager of internal services, said the city entered into an agreement with Gallagher Services Inc. about a year ago to help the city in the process.
“We backed away and decided we needed an expert,” she said.
The city paid the consultant $49,500.
Several providers responded to the city’s request for proposals to provide health insurance. Blue Cross Blue Shield’s proposal had a 4.82 percent, or $280,000, annual cost savings. Scott & White had an 8.77 percent, or $509,000, annual cost savings.
Farris said because the city funds all of an employee’s premium on base plans, the city is inheriting the cost savings. Employees enrolled in the mid- or high-level plan or those who have dependents on their policies will experience nearly 9 percent savings with Scott & White, or nearly 5 percent with Blue Cross Blue Shield.
While the city would experience a higher cost savings with Scott & White, the in-network coverage area would decrease.
“The advantage of Blue Cross Blue Shield is that their access is national. So, across the nation if you have Blue Cross Blue Shield and you get outside of Texas, there are providers,” Farris said. “When you look at Scott & White, their providers are across the state. They pretty much cover Texas and that is where most of our employees live.”
Under Scott & White’s health coverage, Seton Medical Center Harker Heights would become out-of-network. It’s currently in-network with the city’s Blue Cross Blue Shield coverage.
“We built this hospital at the request of this community, who promised to support us and asked that we support it in return,” said Melissa Purl, a Seton spokeswoman. “We have upheld our promise and have been supportive in every way we can. We are proud of our successes and excellent patient outcomes. We want what is best for our community. We feel that offering patients a choice is the best.”
Farris said 76 percent of city employees use Scott & White in-patient and out-patient clinics and Metroplex. She said the remaining 24 percent are split among other facilities, including Seton.
Specialty facilities, such as M.D. Anderson Cancer Center and Texas Children’s Hospital, that currently are in-network with Blue Cross Blue Shield would become out-of-network under Scott & White’s plan.
Farris said employees could still use those facilities, but they would be out-of-network on the Scott & White health plan, meaning workers might pay more for care.
“(Cost) varies with the plan selected — base, mid, high — and with the type of service,” Farris said. “Both (Blue Cross Blue Shield) and (Scott & White health plan) have the same maximum caps for deductibles and co-insurance for in-network and out-of-network expenses.”
Although the move to Scott & White would eliminate M.D. Anderson as an in-network provider, covered employees would still have access to in-network specialty care at Baylor-Scott & White.
The city is recommending its dental insurance remain with MetLife. However, dental insurance premiums will increase 10 percent — $43,364 annually. The Employee Benefits Trust — comprised of the Killeen City Council and mayor — is set to discuss the move Tuesday during a workshop following the council’s 5 p.m. meeting.