May 20, 2009
Summit County can immediately save $1.5 million per year while giving its employees the same or better health and dental benefits that they have today. Here’s how:
The majority of Summit County taxpayers do not receive health insurance from an employer. They purchase their own individual or family ("personal") health insurance policy directly from a major health insurance carrier such as Regence Blue Cross, Humana, United, Altius or Select Health.
Personal health policies cost 1/3 to 1/2 the price of employer group coverage for the same benefits from the same carrier. Personal policies are guaranteed-renewable until age 65 (when you get Medicare) no matter what happens to your health. But, there is a catch. You have to be healthy when you apply to initially qualify for a personal policy. Fortunately, the 10%-20% of people who don’t initially qualify for a personal policy now get state-guaranteed coverage through a Select Health administered program called HIPUtah which is heavily subsidized by the state and federal government.
Meanwhile, Summit County currently spends approximately $3 million in public funds providing its 326 Summit County employees, including elected officials, a bloated inefficient group health insurance policy — a policy purchased through an insurance agent who earns several hundred thousand dollars per year in commissions on the policy. This $3 million cost works out to about $10,000 per employee, one of the highest employer-paid costs for health benefits in the United States of all public and private organizations.
But more than the cost, it is simply immoral to take taxpayer funds and lavishly spend it on benefits that most of these taxpayers don’t have for themselves or their families.
Summit County should immediately follow the lead of private employers and switch to simply giving each employee a tax-free allowance of half this amount, about $5,000 per employee, to purchase their own personal health and dental insurance policy. If Summit County did this:
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(1) The overwhelming majority of Summit County employees would receive much better health benefits at far less cost;
(2) Employees who don’t medically quality for personal policies would receive state-guaranteed coverage that could be further supplemented by Summit County; and
(3) Summit County would immediately save approximately $1.5 million per year which would go a long way towards funding nonprofits, repaving our roads, and other items that would greatly improve life for all Summit County residents.
Paul Zane Pilzer is 27-year resident of Park City and the founder of the two leading U.S. companies helping employers administer define- contribution employer health benefits.