Kansas Health Institute | Information For Policy Makers. Health for Kansans.

TOPEKA — State employees will likely pay more for their health insurance in 2011, but not as much as previously expected.

Earlier this year, the Kansas Health Policy Authority, which administers the State Employee Health Benefit Plan, predicted that the state plan would be $4 million in the hole by the end of 2011 – prompting talk of a possible 42 percent rate increase for employees.

But new estimates of lower expenditures and higher contributions to the plan brought better news on Monday to members of the Health Care Commission, the board that approves and oversees design of the plans.

Now the state insurance fund is expected to end 2011 with about $14 million in the bank.

Though the projections are somewhat more positive, significant changes will still need to be made to keep the plan in the black, said Secretary of Administration Duane Goossen, the commission’s chairman.

“We’re still spending more than we’re taking in,” he said. “Maybe we won’t fix that in one year. But we do have to take steps to correct the situation.”

The Employee Advisory Committee, a 21-member group that provides feedback and input on the state’s insurance plan design, made several recommendations to address the fund’s low balance.

Among the recommendations:

• Increase co-payments by $5. Primary care office visits would change from $20 to $25 and specialist visits would change from $40 to $45.

• Increase deductibles from $150 to $400 for single employees and from $300 to $800 for families.

Commission members appeared receptive to the advisory committee’s recommendations.

Additionally, the commission discussed raising employee premiums by 9.5 percent to mirror the expected trend in health care costs. State agencies would face 15 percent increases for their share of health insurance premiums.

That could mean an increase of $1.82 per month for a state employee earning between $28,000 and $48,000 yearly and enrolled for individual coverage in Plan A, the state's most popular health insurance plan. An employee with family coverage could pay $31.82 more per month.

State agencies pay 95 percent of individual coverage and 55 percent of dependent coverage.

No decisions were made on the insurance plans during Monday’s meeting. A vote will be taken during a yet-to-be-scheduled meeting in May, after the Legislature makes its final decisions regarding state employee salaries and state agency budgets.

If salaries remain flat or are cut, if efforts to raise salaries considered “under market” are halted and if employees’ contributions to the state’s pension fund go up, workers’ paychecks will be smaller, Goossen said, regardless of any increases in health insurance premiums.

The health insurance fund has changed dramatically in recent years. In 2007, it had an ending balance of more than $220 million.

The HCC added benefits such as annual wellness coaching to gradually spend down the reserves. Then last year, the Kansas Legislature swept about $60 million from the fund, further shrinking the reserves.