Costly annual increases to medical insurance rates have two cities looking to find stability in numbers.
At the beginning of the year, Washougal and Camas will join a medical insurance program through the Cowlitz-Wahkiakum Council of Governments to stabilize growing premium costs. The three-year-old program is intended to lower what the cities pay by grouping them into a larger risk pool.
As a requirement to participate in the insurance pool, member agencies must also agree to provide health management incentives designed to promote wellness among their members.
“Overall, those incentives do keep costs down,” said Jennifer Gorsuch, Camas’ director of human resources.
Currently, the cities belong to one large pool through the Association of Washington Cities for their Regence insurance. However, the cities are not pooled into a larger group for the coverage they receive through Kaiser.
Both Camas and Washougal say the move would save at least $5,000 a year, or slightly more than 2 percent of what they pay now. The cities intend for those savings to grow in years to come.
In Camas, insurance premiums have increased by an average of 12.5 percent annually in each of the last three years. Washougal cites a similar figure, with the city spending between $325,000 and $336,000 on its Kaiser coverage during those years.
Industrywide, medical insurance premiums increase by an annual rate that’s between 9 and 12 percent, which Gorsuch said affects the city’s bottom line.
“It’s high in our minds,” she said.
There’s no guarantee the rates will decrease. Cities could lose money if there are spikes in insurance claims that spread the risk among the pool. But being part of a larger pool would result in fewer peaks and valleys in the cost of premiums, stabilizing insurance rates in the long run, said Washougal City Administrator David Scott.
Camas passed an ordinance to join the pool at its Nov. 19 meeting. Washougal did the same on Monday.
In Washougal, Mayor Sean Guard said he views grouping public entities into larger insurance pools as a common-sense approach to lowering insurance premiums in the future.
“To me, it is a simple move that should provide for better stability,” Guard said. “But, if not, we can always opt out and go back to our own pool or look at other alternatives.”