Two years ago, a financial crisis at the nonprofit trust that provided health coverage at more than 200 Montana school districts had its clients deserting in droves, as rates jumped 40 percent or more.
“We started losing schools; they were dropping like flies,” says Eric Schindler, chief executive officer for the Montana Unified School Trust (MUST).
Nearly 100 schools left MUST, seeking a better insurance deal. The exodus threatened MUST’s survival as a health insurer for thousands of Montanans.
But now, two years later, the trust has bounced back, stabilizing with 120 school districts and 7,600 people covered.
Its average premium this year will increase 5.8 percent, Schindler says, which is below the average forecasted nationally by most actuaries.
MUST also helped 17 small school districts form two health insurance cooperatives, which are offering better rates for their members, and is rolling out what Schindler says are innovative new programs to help control health care costs and, in the long run, members’ premiums.
“The whole key to this is, how can we help people stay well?” he says. “I believe it’s the key to more manageable premium increases in the future.”
Schindler, a former executive at Blue Cross Blue Shield of Montana, joined MUST shortly after its financial problems unfolded in mid-2010.
The nonprofit trust had low-balled premiums when it had high reserves, but then began seeing a surge in high-cost claims. Its reserves plummeted from almost $19 million in mid-2007 to $2.5 million in 2010, and the trust had to dramatically increase insurance rates to avoid going bankrupt.
At the time, MUST provided health insurance at 230 school districts and related organizations, including the Kalispell and Butte districts and many other smaller districts, covering some 19,000 people.
School districts in Billings, Missoula, Helena and Great Falls are self-insured or buy their own policy, and have not been part of MUST.
The huge premium increases at MUST prompted scores of districts to look elsewhere and leave the trust, including Butte, although Kalispell remained.
Schindler says it was a tough time for MUST, but that the turmoil is behind it. Premiums increased an average of 11 percent last year, but will go up only 5.8 percent this year, on average.
“Health care costs are still going up,” he says. “We’re still faced with having to charge an adequate amount to the people who teach our kids and who help support our schools. … (But) we’re pretty tickled to be at 5.8 percent in today’s environment.”
The trust’s reserves increased to $5.5 million last year, and MUST also is working on new approaches to help reduce costs, Schindler says. About two-thirds of the plan’s costs are caused by 5 percent of those covered, so MUST wants to narrow that 5 percent, Schindler says.
One of the trust’s contractors, Alere, which currently helps manage chronic-disease treatment for 700 of the 7,600 people covered by MUST, will do it for the entire membership starting July 1.
The program includes notifying customers when they should come in for check-ups, blood tests and other services aimed at preventing more expensive health problems, as well as identifying those who might need some wellness advice.
“Our focus is to keep people out of that 5 percent who are spending 65 percent of the money,” Schindler says. “You have to be able to figure out who it is, and we’ve offered incentives for people to engage in their own health and wellness.”