State employees' insurance could go up again

Patrice Anderson has struggled with cancer for four years. But she hasn't struggled with financing her treatment.

An administrative assistant at the Department of Health who makes about $40,000 a year, Anderson has fought two bouts of non-Hodgkin's Lymphoma, the most recent recurrence coming in February. The cost of chemotherapy alone — delivered over several days — could buy a small car.

"On the first day, one drug costs $2,000, almost $3,000," Anderson said. "The next day is a Friday, and the second drug costs $9,000. The third day I go is a shot, and that's about $4,000. So it's about $15,000 every time I have a treatment."

But in the state employee plan, her costs are relatively small. Anderson pays a $25-to-$35 co-pay for her treatments, and a $300 co-pay for hospitalizations.

"I've had a lot of costs that could have affected me and my family," Anderson said. "But because of the co-pays, the amount of money to come out of my pocket is small."

Anderson is one of approximately 90,000 people statewide who are covered by the State Employees Health Insurance Plan, administered by the State Employees Insurance Board (SEIB). A subcommittee of the SEIB is scheduled to meet Thursday morning to begin the process of setting premiums and co-pays, which generally take effect on Jan. 1. The full board is expected to consider the proposal in mid-August.

The good news for state employees is that the financial situation for the board appears less dire than last year, when the board kept premiums level but increased a number of co-pays. However, board members will have to find a way to address a $27 million deficit, which could lead to new costs for those in the program.

"All the things that were on the table last year will be on the table this year," said William Ashmore, the CEO of the SEIB. "Then it's up to the committee and the board to decide what portion of the shortfall will come out of reserves, and what portion will come from premiums and benefit adjustments."

Traditionally, state employees accepted lower pay in return for better benefits. But those benefit packages have been challenged more and more in recent years. Cuts to state government, driven by budget crises and small-government philosophies from governing Republicans, have reduced the employee workforce by 11 percent since 2010, driving down the number of active employees contributing into the system.

Some stability in the state employee population has helped the SEIB in recent months.

"It's in a little bit better shape, but we've still got issues," Ashmore said.

The SEIB has $27 million in reserves, which could close the entire deficit this year if needed. However, Ashmore said that using it all up this year would leave nothing to deal with any shortfalls in the following year.

"What the board has been doing over the past few years is try to take a balanced approach," he said.

After discounts, employees pay about $18 a month for medical and dental coverage for an individual, and $213 for a family. Last year, the board left premiums as they were, but increased the co-pays for a number of different medical services.

While state employees generally pay less for their insurance than those in the private sector, many typically make less as well. The median salary for state employees last September was $37,389, according to the Alabama Personnel Department.

"Any increase is going to be felt, especially for those who carry family coverage," Anderson said. "For me, it may not be as bad because I'm not caring for anyone but myself. But many state employees don't make $40,000 a year. They make $20,000, or $25,000. It will definitely hurt them."

Paul Bivins, a psych associate at Staton Correctional Facility in Elmore County, needed open-heart surgery about three years ago, which was covered by the plan. His two children, both in their 20s, are covered under the program.

Bivins said increases would probably not hurt him terribly, but that "small increases add up." But like Anderson, he said he is pleased with the quality of benefits he gets in the program.

"I'm very pleased I have health insurance," said Bivins. "I'm glad to have it. It's one of the most important benefits we have."

Gov. Robert Bentley last year restored merit raises after a five-year freeze, which allowed many employees to see pay increases between 2.5 and 5 percent. State employees are expected to receive a $400 bonus under next year's General Fund budget. However, state workers have not received a cost-of-living increase in nearly six years.

"We certainly hope there won't be any (insurance) increases," said Mac McArthur, executive director of the Alabama State Employees' Association. "When you look at state employees not having had a COLA since Oct. 1, 2008, certainly raising anything on that front would be a pay cut."

Anderson, who found out Tuesday her cancer is in remission, agrees with that.

"From what I know about insurance rates in the private sector, the state employees' costs do come under the private sector," she said. "But our salaries also come under the private sector rates."