When City Manager Zach Walker first presented Independence's proposed fiscal year 2019-20 budget last month, it included several proposed changes to the city's health-care coverage that project to about $7 million in annual savings and covered a projected $3.6 million shortfall on the general fund.
Walker has since called back several of those changes, including the plans for current employees and the pre-age-65 city retirees who aren't yet eligible for Medicare. To compensate, more than $1.6 million in proposed spending has been sliced from the budget – the largest chunk being nearly $450,000 for six new police officer positions.
They are among a series of budget amendments on the Monday's City Council agenda, as the council will have the second reading and possibly vote on the budget. The new budget takes effect July 1.
The proposed 8 percent premium increase – 4 percent now and 4 percent after another six months – has not been debated much and remains planned.
The thorniest issue continues to be coverage for the post-65s. Their coverage currently consists of Medicare first and then the city's supplemental Cigna plan covering expenses not already paid – with a city/employee premium split of 83/17 or 80/20 depending on the date of retirement. They have an annual out-of-pocket cost cap of $3,000.
The proposed budget calls for bidding out those retirees' coverage to Blue KC as a Medicare Advantage plan starting in 2020. Many retirees and citizens see it as inferior coverage compared with what had been previously promised and balancing the budget on the retirees' backs. But city officials say the proposed new plan is more modifiable for retirees and can be less costly for them – not just the city.
Chris Rohrs, a retired firefighter and member of the Stay Well Committee that advises health-care matters, said Monday, “We've got a lot of work ahead of us.”
“We are working together, trying to find a solution that makes each side happy,” he said. “We want to come up with something better than what we've been offered.”
Rohrs said the committee asked for a premium increase last year to help keep the Stay Well fund healthy, and the premium increase this year should be enough to not have to alter health care plans.
“The post-65s are a cash cow – we are and the young ones,” he said. “They pay a premium and don't use it because they're mostly healthy; we pay a premium and Medicare covers much of it.”
“I thought the post-65s benefitted the Stay Well fund because they put in more than they take out,” Council Member Karen DeLuccie said.
Assistant City Manager Adam Norris said that depends on individual claims and the retiree's experience. Walker added that, “Right now, the plan cost is higher than the contribution.”
Projections from Lockton Companies, the city's health-care consultant, show the
Stay Well fund balance would be about $340,000 greater at the end of 2020 without the post-65 retirees' contributions and costs.
The council has another meeting, a study session, scheduled for June 24, though at times the council has also had a special meeting agenda with study sessions to cover necessary items that might arise.