County creating health plan to cut costs AFDC children to join public workers in insurance pool


In an attempt to stem a double-digit rise in health insurance costs, Anne Arundel County is devising its own managed-care health plan for its employees.

Anne Arundel would become the second county in the state with a self-insured health plan -- Prince Georges is the other -- and the first that includes the children of welfare recipients on its roles.

Switching some 11,000 children whose parents receive Aid to Families with Dependent Children from Medicaid to the county program will provide them with better, more efficient and cheaper health-care services, county officials said. And it will save the county money by increasing the size and lowering the average age of the insurance pool.

An insurance actuary looking at the county's work force would see a high-risk, middle-aged population with "bad habits, like smoking," said Frances B. Phillips, the county's health officer.

"We thought this is something that would benefit county employees, by pooling a large group of people who are generally healthy, young kids," she said.

In addition, adding the 11,000 children to the county's 4,000 employees and the community college's 500 employees makes for a bigger pool, leading to savings for the county and its employees as health costs are spread around.

Ms. Phillips said she had been asked by County Executive Robert R. Neall to look into including AFDC children in a managed-care health plan about two years ago, "when the state cuts to Medicaid were off the charts."

Maryland already offers a managed care system for Medicaid recipients called Maryland Access to Care (MAC), which links patients with personal physicians in an attempt to foster a relationship, provide preventive health care and reduce emergency room visits.

Ms. Phillips said that Anne Arundel's plan will be more closely managed and will provide more patient follow-up.

"The state took what I call a baby step," she said. "We're taking a giant step with our AFDC people."

Dennis Parkinson, Mr. Neall's chief administrative officer, said the county had been given a green light to develop the program by both the federal and state governments, which co-administer Medicaid.

Mr. Neall, who was an executive with the Johns Hopkins Health System before being elected county executive, said he began looking into managed health care because he was troubled by employee health insurance costs that were increasing by as much as 20 percent each year.

Health insurance will cost the county $22 million this year, and could cost $29 million in three years if nothing is done.

Mr. Neall said he would like to reduce the increase to about 8 percent.

"The idea is not to reduce our costs," he said. "It's to stop our costs from increasing so rapidly."

The county pays 90 percent of the cost of health insurance, with employees paying the remaining 10 percent, an arrangement county officials say is more generous than what is offered to the employees of other counties and the state. Union officials, who have not seen Mr. Neall's plan and who must agree to it in negotiations before Oct. 1, are a bit leery.

"I think everyone is concerned about health care," said Helen Simpson, president of the American Federation of State, County and Municipal Employees, Local 2563, which represents the county's clerical employees. "Health insurance [benefits], like pensions, are very near and dear to us."

But Mr. Neall said he is sure they will like what they see. Employees still will be able to choose between the Blue Cross/Blue Shield preferred provider network and three health maintenance organizations, a reduction from the current five.

The managed-care system, called a "point of service" plan, will replace the county's traditional Blue Cross/Blue Shield plan.

The county has solicited bids from 22 companies and will choose one that will administer a network of doctors and hospitals. Employees will have the choice of using one of the plans' doctors at very little cost, or using their own doctor and paying a higher fee.

Mr. Neall said he hopes to provide a very large network of doctors so employees who scan the list would be likely to see their doctors' names. "If you can achieve that, then the major obstacle or line of resistance is gone," he said.

Prince George's County officials said most of their employees seem satisfied after the system was carefully explained to them. And the growth of health care costs has not only slowed, but dropped dramatically, from $21.2 million in fiscal 1991 to $17.3 million in fiscal 1992, the year the plan went into effect, said Kathy Colbert, county benefits manager.

After Anne Arundel officials negotiate with employee unions, most likely next week, open enrollment for the managed-care plan would be held in mid-October.

The plan would begin operating Jan 1.

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