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City health savings disappoint Manchester officials

New Hampshire Union Leader

March 18. 2014 11:04PM

MANCHESTER — City health care costs are on track to exceed the budget for the current fiscal year by $2.3 million, a large shortfall that is raising questions about why union concessions are not resulting in greater savings.

The new projections were reviewed by the aldermen’s Committee on Accounts on Tuesday.

“We were hoping the plan change would save money,” said Guy Beloin, the city’s assistant finance director.

Beloin told the committee that claims data had to be further analyzed to determine whether the higher than anticipated health costs were being driven by city employees getting more treatment or by higher costs for care.

Beloin noted that health care costs hadn’t escalated dramatically; rather the city had budgeted $2 million less for health care in the current fiscal year than the previous year, on the assumption that contract concessions would result in greater savings.

Beloin noted that total claims costs were comparable to what they were in 2012, but that there were 62 more people covered by the city then.

Later on Tuesday, the full Board of Mayor and Aldermen voted to move forward a proposal for the city to hire a $48,000-per-year wellness coordinator who would provide guidance to employees on nutrition, exercise and receiving preventive medical care. The board voted, without discussion, to send the proposal to the Committee on Human Resources.

Under contracts between municipal unions and the city first reached in 2012, city workers have seen their health insurance premiums go up; their office visit co-pays went to $20 from $5. Currently, workers pay 15 percent of their premiums.

In the 2013 fiscal year, the city spent $2.4 million less on health care than it did the previous year. This figure, however, was also $1 million higher than projected in that year’s budget.Following Tuesday’s meeting, Mayor Ted Gatsas, who has pushed for the health care concessions, said he and his staff are examining what’s causing the higher than expected costs.

“We’re looking at it now,” he said. “There’s no real understanding whether it’s utilization or costs. But I think it settles out if you at where we were last year.”

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