City council members got a detailed briefing on the citys health insurance program during their work session Thursday.

The hour-long presentation was directed by Susan Smith, executive director of Texas Municipal Leagues Intergovernmental Employee Benefits Pool, which administers the citys health coverage through United Health Care.

Health care plans are very expensive, Smith admitted to councilmembers as she reviewed the citys medical cost experience since TML took over health coverage in June 2012.

During that period, the city had unusually high costs, largely due to higher than anticipated medical costs for several employees and retirees covered under the citys policy.

Weve experienced several bad years where weve had a number of catastrophic illnesses, Smith explained. And premiums from your current employees are subsidizing your pre-65 retirees.

For the period of June 2012 to May 2013, the citys health care program paid out almost $2.4 million in medical benefits while recovering $1.4 million in premiums. From June 2013 to May 2014, costs were almost $2.3 million while contributions were at $1.4 million. Since June 2014, projected costs have been almost $1.8 million with contributions of $1.4 million.

The number of covered individuals falling into the high reserve/high risk pool, who had medical charges at or near the $50,000 point where the citys stop-loss reinsurance coverage comes into play, has been unusually high in recent years.

In 2012-13, there were 32 in the high-risk category. That increased to 33 during 2013-14, including 11 that rolled over from the previous year. Thus far this year, there are eight individuals in that high-risk category, including four who rolled over from the previous year.

We are trending much better than we were the first two years, Smith notes. However, the administrative costs for health insurance programs in general will be increasing significantly under the federal Patient Protection Affordable Care Act. Currently about $1 per covered individual, those administrative costs will rise to $63 per person next year.

Health care coverage is not going to get any cheaper in the future, she said.

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City council looks at health care costs 10-10-14