Minutes 08/23/1983 - Laserfiche WebLink

Home Browse Search

16 ~ TUESDAY AUGUST 23, 1983 - General Life Insurance Company, and partially from Horace Mann Insurance Company), Mr. Stinnett reported that the bids submitted by Blue Cross-Blue Shield of Virginia (Richmond Plan) were the most favorable and competitive. Noting that medical costs are expected to increase by 18% per year, the consultant recommended that, for the City's employees, the City change to a comprehensive major medical program which, with the use of deductibles and coinsurance, would introduce more cost-containment features and, thereby, encourage employees to become more involved in types of medical services available as well as to seek more out-patient services, with the result that, aside from a reduction in the amount of premium increase this year, premium costs can be better controlled in the future. The consultant further recommended that the coverage plans (for both the City and the School System) be combined, with the experiences thereof to be separated in order that the ratings can stand on their own. In addition, the con- sultant noted that the recommended comprehensive major medical plan can be more easily administered. On behalf of Connecticut General Life Insurance Company, Mr. William Greenleaf (its Rich- mond Office Sales Manager) maintained that, based on the loss ratio (of 108% claims paid against premium received) for the past twelve months and on the anticipated 20% escalation in medical costs, acceptance of the lowest bid (i.e., that submitted by BC-BS of Virginia) would constitute a short-term solution to a long-range problem. Mr. Greenleaf also questioned the significant difference between the bid submitted by BC-BS of Virginia and the bid submitted by BC-BS of Southwestern Virginia. Mr. Greenleaf then urged Council to defer action on bid proposals, pending further study thereof. Mr. Carl Slone, Director of Sales of BC-BS of Virginia (Richmond), noted that BC-BS of Virginia retains a lower per- cent age (of premiums paid) than does BC-BS of Southwestern Virginia, that the BC-BS organi- zations do not pay a premium tax (as do for-profit carriers), and (that) a 6% hospital dis- count (in effect) is afforded BC-BS-covered groups. Both Mr. Slone and Mr. Greenleaf com- mented on such factors as cost-containment and cost-utilization. Mr. James F. Hodnett, local representative of Connecticut General, alleging that BC-BS of Virginia aubmitted an unreasonably low bid ".....to get the business", asserted that Connecticut General's - quoted rates are justified and reasonable. Mr. J. Michael Meador, (of Burch-Hodges-Stone, Inc.), speaking as a citizen and taxpayer, maintained that for Council, having retained an