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Schools

Racine Unified Experiences $2 Million Spike in Insurance Usage

Employees Rush in Before Deductibles Climb

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Racine Unified School District employees rushed to their health care providers before their share of health costs increased on July 1.

The RUSD School Board’s audit committee on Tuesday, July 5, was told that health insurance usage jumped by about $2 million during May and June. Because RUSD is self-insured, the higher-than-anticipated claims activity will affect the fiscal 2011 budget, which ended June 30.

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“It has an impact on our cash flow,” said David Hazen, RUSD’s chief financial officer. “But, we believe we’ll make that up in the coming year because almost all elective (medical procedure) claims will have taken place.”

Hazen added that he’ll soon be discussing the financial impact of the usage spike with the district’s actuaries.

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“I expected it to be something, but not like this,” he said.

RUSD budgets about $52 million a year for employee health care. It pays for health care claims from premiums collected from employees. The program is administered by United HealthCare.

In anticipation of sharp cuts in state school funding, RUSD increased the deductibles that employees would pay starting July 1. The high-deductible plan was approved by the district’s unionized workforce in March.

Although health insurance claims took an unexpected jump, RUSD’s Employee Health Center produced better-than-expected savings in its first full year of operation.

The clinic, which opened last fall on the Wheaton Franciscan Healthcare campus, 3805 Spring St., was created to handle routine health care needs, screenings and vaccinations at a lower cost than referrals to physicians.

Hazen told the audit committee that the health center saw about 200 visits a month during fiscal 2011. By using the facility, employees and family members saved the district $93,261. When rental and a physician fee are deducted, the net savings are about $59,000.

“We really thought we’d just break even the first year, so this is a positive,” Hazen said. He added that the health center may see even higher usage in the year ahead as employees look for ways to prevent paying higher deductibles for health care.

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