LARGO — Rising prescription drug costs and coverage plans for retirees may add up to higher health insurance costs for Pinellas County school employees next year.
But school district officials hope some free medical programs, discounts for healthy behaviors, and changes to retiree insurance presented during Tuesday’s school board workshop can soften the blow.
Specialty drugs such as anti-depressants and injectable drugs such as insulin cost the school district $12.3 million in the first nine months of 2013, said Ted Pafundi, director of Risk Management and Insurance for Pinellas County schools.
During the same period, the school district paid $12,290,488 in pharmacy costs, according to school district documents.
The district employs about 17,000 people and insures about 32,000. Although only 336 members use the most expensive “Tier 3” specialty drugs, they accounted for about 46 percent of all pharmacy spending, Pafundi said. They pay only about 13 percent of their prescription costs, an average of $90.84, and the school district picks up the rest, an average of $614.48.
By comparison, those who take generic medications pay 44 percent of their prescription costs, and those taking slightly more expensive brand-name drugs pay about 28 percent of their costs. The district needs to shift costs so drug users pay a greater share.
One suggestion to lower costs is to split drugs into four cost tiers instead of the current three. Another is to consider a “Tobacco Free” discount because tobacco users have much higher health care costs than average, Pafundi said.
The district also will encourage more people to enroll in free preventative services and exams. Many clinical programs, such as diabetes care, mental health counseling and asthma care, that can help to manage medical conditions and possibly decrease costs are under used, Pafundi said. For example, only half of the 1,194 insured members with diabetes participate in the diabetes care course. Only 200 are collecting free diabetes supplies and medications they could get by attending the diabetes education program and receiving annual screenings. And the Tobacco Care program allows employees to get smoking cessation products on co-pay if they participate in coaching to help them quit.
This year, the school district brought in three Humana representatives to help employees connect to the services. Pafundi said the representatives work at the administration building to provide one-on-one assistance, conduct educational programs, and advocate on behalf of employees and their dependents.
Another cost factor is a Florida statute passed last year that requires the school district to offer all eligible retirees the same health benefits at the same costs offered to active employees. Those 65 or older who are covered cost 40 percent more than what they pay in premiums, Pafundi said. Other plans, such as the group Medicare plan or public exchanges, could be less costly for the school district. In addition, spouses of school employees account for 19 percent of those covered, but 26 percent of spending, Pafundi said. To offset those costs, the school district may consider a “spousal surcharge.”
According to Humana, children made up 18.9 percent of membership and 11 percent of total spending; adults ages 26-44 made up 23.7 percent of membership and 16 percent of total spending; and those ages 45-64 made up 44 percent of membership and 59.8 percent of spending.
Any changes to the plan have to be negotiated with the teachers’ union before going into effect. Those conversations will begin in April. The proposals are nothing new, said Bruce Proud, executive director of the Pinellas County teachers’ union, but any added costs being shifted onto employees is always a concern.
“I haven’t seen any real proposals to enhance health coverage, and any incentives are really a question of access,” Proud said. “There are some cases where this is already costing employees more than the average, so we have to bring some balance to the conversation.”