Emergency Manager Kevyn Orr today announced a new proposed health care plan for city employees that maintains premiums while delivering comparable service and saving taxpayers nearly $12 million a year.
The proposal, unveiled to city union representatives today, is part of Detroit’s ongoing restructuring efforts designed to lower its suffocating $18 billion in debt while improving essential services to nearly 700,000 city residents. The proposal is the latest overture in ongoing negotiations between the City and representatives from its 47 public employee unions.
“This proposal represents the City of Detroit’s good-faith efforts to continue to provide its employees with quality benefits as the City progresses through restructuring and begins to provide improved services to residents,” Orr said. “We think this is the best plan we could propose given Detroit’s financial crisis but I look forward to hearing from union leadership on their ideas to lower healthcare costs.
“The City’s plan holds the line on premium costs for employees while allowing Detroit to save enough money to put another 100 police officers or firefighters on the streets.”
The City’s proposal streamlines the 20 different plans available to employees while improving services. The increased economy of scale that will result from fewer plans will create efficiencies that help control health care costs for employees and taxpayers. For instance, the proposed plan preserves the current 20 percent employee premium payment with the city paying 80 percent of premium costs.
The proposed plan also adjusts individual and family deductibles to better match health care plans offered in the private sector. Under from City’s proposal, a single city employee with no dependents will see his or her annual deductible increase to from $200 to $750, with total out-of-pocket expenses capped at $1,500. A married city employee with a family will see his or her annual deductible increase to $1,500, and total out-of-pocket expenses for a family would be capped at $4,500, up from $3,000 currently.
City employees would keep most of the covered services offered in current plans. Prescription drug copayments would remain unchanged; doctor visit copayments will stay at $25; coinsurance is unchanged at 20 percent for most services; preventative services will be free of charge; and, vision and dental plans will continue to be offered.
“The City’s health care proposal offers a competitive and affordable benefit plan for our employees without raising premiums,” Orr said. “This plan saves money and allows the city to invest in much-needed essential services without sacrificing quality health care for which Detroit’s employees work hard.”
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