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MCS, Unions Agreement Reduces Health Ins. Costs

Written By The Mountain Eagle on 12/4/23 | 12/4/23

By David Avitabile

MIDDLEBURGH - The Middleburgh Central School District have reached an agreement with all of its collective bargaining units in a move that will stabilize the district’s prescription drug costs. 

The district has seen a $1 million increase in its prescription drug costs over the last three years, and for the current year, costs have increased by $30,000 a month. With revenues expected to tighten significantly in the next state budget, the district convened its Health Insurance Advisory Committee which includes representatives from all collective bargaining units as well as retirees. 

After many meetings and a day-long collective bargaining session, an agreement was reached just before the Thanksgiving break. The agreement was ratified by all bargaining units and approved by the Board of Education. 

The agreement provides enhanced benefits for retirees and stabilizes the District’s prescription drug costs. Additionally, the agreement results in little to no disruption to planholders while providing the same high-quality coverage. 

Effective January 1, 2024: All planholders who are retired and Medicare-eligible (age 65) will be automatically enrolled in the district-sponsored Medicare Advantage Plan (MAP). A Retirement Health Reimbursement Account (RHRA) will be established for each planholder (retiree or spouse) with a $500 yearly maximum. The district held a question and answer meeting for all retirees on Wednesday at 5pm in the High School Auditorium.

In September, MCS officials began seeking options as they are facing "exploding" costs for health insurance and prescription costs.

MCS currently uses the Capital Area School Health Insurance Consortium.  The health insurance plan costs went up seven percent and the prescription drugs went up 20 percent for 2022-23. Middleburgh officials anticipate the prescription drug costs will increase by 30 percent for the 2024-2025 school year.

On July 21, the consortium announced that they underestimated expenses by $7.9 million for 2022-23. Middleburgh's portion was four percent or $316,000, on top of $350,000 that the district transferred in June, Superintendent Mark Place told school board members in the fall.

Middleburgh Central School has approximately 300 plans, 100 active and 200 for retirees. This translates to about $1,000 for each plan for the extra $316,000 cost in July, Mr. Place said. Health insurance costs were off by 11 percent.

MCS is facing similar increases on the prescription side, Mr. Place explained. The district faced a deficit of $291,000 through April and ended the year with a deficit of $771,000, basically a cost of $2,500 per district plan. There were $2.1 million in prescription claims for the year.

In all, the consortium underestimated prescription costs by $12.4 million in 2022-23 and medical costs by $7.9 million, for a total of $20.3 million for both, Mr. Place said. This means that costs were off by about $3,700 per district plan for health insurance and prescription costs.

The consortium, he explained, did not want to "hit the districts with a big increase" during the pandemic and now the premiums are rising.

Overall, the health insurance premium was off by 11 percent and those "requests for underestimated expenses" or "calls" will probably continue this year and next.

The district, Mr. Place told school board members, needs to look elsewhere for a solution. The district does not have a lot of time as they have to give the consortium an 180-day notice if they are going to make a change. The district needed to be make a decision by the end of December and a change would have to be done for both health insurance and prescriptions.

State aid for the next school year could rise by $300,000, he added, and the increase in prescription costs could take up that entire amount.

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