Proposed health plan increases disparities

A speech by Ali Fuhrman

Hello. My name is Ali Fuhrman and I am the president of AFSCME Local 2822, representing 1200 support staff workers here at Hennepin County.

Income inequality abstract concept vector illustration. Country income distribution, financial gender discrimination, social economic inequality, gini coefficient, salary gap abstract metaphor.
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You may or may not be aware, but since contracting with UMR our healthcare plan has lost an estimated $7.5 million in revenue through June of this year. We are being told that we have to raise an additional $42 million for 2024 and that to do so we must increase healthcare costs to members by 31.5% and introduce deductible plans.

I am joined today by other AFSCME presidents to say: absolutely not! Our members will not pick up the bill for an error the county made in signing a contract with UMR. We have picked up the bill for too long. In 2018, 2019, and 2020 we paid $34.3 million above what was needed to cover our healthcare costs. In 2019, we had a surplus of $59 million. Now the reserves are at $7.5 million. Why is that?

Our healthcare plan is used as a revenue stream for the county

Instead of thinking about the long-term solvency of this plan, you and your predecessors chose to use the plan as a piggy bank. In 2019 you authorized a premium holiday that cost the plan $13.7 million. Then in 2020, at the height of the pandemic, you authorized another premiuam holiday that took an additional $9.7 million from the plan.

To quote the board action request that initiated the 2020 premium holiday: “The reserves have continued to grow resulting in surplus reserves for the county. The county savings realized by waiving the premium collection will help with budgeting pressures experienced in 2020 and 2021.”

We spent $46.6 million on COVID-related expenses

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Image by storyset on Freepik

It was a huge, unexpected cost that could have been covered instead by federal COVID dollars.

UMR could not provide a four-tier plan, costing an estimated $15 million through the end of the year

Between the premium holidays, the pandemic, and the UMR fiasco, that’s $84.8 million. And now workers are being told to pick up the bill.

With the new plan, if you haven’t seen it already, we are looking at a 57% to 197% increase in premiums for a non-deductible plan and increasing co-pays to $50 for every plan but HCMC and NorthPoint. For a worker who makes the

average 2822 annual income of $42,000, paying for a non-deductible family plan would represent 16% of their annual income. Sixteen percent!

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Image by frimufilms on Freepik

What that means is that everyone who lives paycheck to paycheck or for whatever reason struggles financially will choose one of the deductible plans. Your workers will stop going to the doctor. And people’s health will suffer and the health of their children will suffer.

Why bother having a whole department dedicated to the health of employees if they cannot afford to use their healthcare? This is creating barriers to care. It is the opposite of disparity reduction.

Deductible plans create worse health outcomes and they save the county a lot of money. For every member that pays the $500 deductible, the County saves $2,500 in premiums they would have paid.

If 8,700 employees choose the $500-deductible plan, the county saves $21 million in premiums that they shifted onto employees. The county has $168 million of unspent COVID funding. We have been talking with workers in these departments. They are being told they are way under budget and to spend, spend, spend.

We have a better solution. The last date of healthcare consensus where labor and management meet is August 24. A decision must be reached by August 31. Tell labor relations and HR: Don’t change the plans for 2024. Use $42 million in COVID funding to cover the increase in costs. Break the contract with UMR and find a new provider that can offer us a plan closer to the one we have now.

You have the choice to follow your purported mission of disparity reduction and workers’ rights, or you can choose to take away workers’ healthcare.

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