Joe Harten

Premium costs were driven by both the general increase in health-care costs combined with claims by city employees for 2001 and 2002 more than double those for 1999 and 2000, and, according to Joe Harten, consultant with Deloitte & Touche, the city has no reason to expect the situation to improve.

Not only is there no reason to anticipate a slowing of health-care cost increases overall, because of a very low turnover, city employees are getting older.Statistically, Harten said, every year past age 35 an individual's health care costs can be expected to go up by about 2 percent.

"Actuarially, every year, everyone in this room gets a year older - on average," Harten said, making what is already an older than average group, even older still.That Harten's statistical observation is accurate is reflected in the fact city employees collect an average of $802 per employee per month in health benefits, 15 percent to 20 percent higher than average.

The city's insurance committee sought to rewrite the city's insurance plans to maintain benefits while bringing down cost to the city and city employees.

The proposal brought to the council cuts the cost increase from 41 percent to 23 percent for 2003.
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The result is a significant net savings to the city, Harten said.

In 2003, the city will pay $263 per month toward single coverage under any of the city's plans, or $737 for family coverage.Costs above those contributions will be paid by the employee.

Harten warned that the city should expect to see health insurance costs continue to climb, despite the best efforts to contain cost."There is an insatiable need and desire for health care," he said.

Councilman George Borzyskowski compared it to another of the city's nagging problems."It reminds me of the Winona State parking problem," he said, "There's no solution to that either."

In other business

The proposed sale of industrial development bonds to RiverStar Inc. produced little comment at a public hearing at the council meeting Monday night.

The council has been asked to approve up to $2,200,000 in industrial development bonds.

Health care costs continue to rise at a rapid pace, said Joe Harten, manager of Deloitte's human capital advisory services.
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Harten said a number of issues contribute to the rising costs, including an aging workforce and the increased use of health insurance.
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Harten noted that there are no guarantees for the future.

Harten said, "We have no illusions that having this plan forever keeps the costs at a steady rate."