Governments Not Escaping Health Cost Sharing Pressure

A news release from Cobalt Community Research about its survey said many respondents had already begun implementing cost-saving measures such as increasing premium costs, increasing deductibles and co-pays, improving wellness, and renegotiating with insurance carriers.

“The report is unusual because it takes a detailed, scientific snapshot of benefit strategies at all levels of local governments – from large counties to small townships,” said William SaintAmour, executive director of Cobalt Community Research, in the announcement.

According to the study, approximately 77% of the survey respondents provide health care to their employees, with 29% also providing health care to retirees. Larger local governments are more likely to provide such benefits.

Much of the report studies local government awareness and response to the Governmental Accounting Standards Board (GASB) Statement Number 45: Accounting and Financial Reporting by Employers for Postemployment Benefits Other than Pensions (OPEB). All state and local governments are expected to disclose information about their OPEB costs and liabilities in their annual financial reports for fiscal years beginning in 2009, the report pointed out.

The report shows that local governments’ awareness of OPEB requirements rose from 81% in 2009 to 87% in 2010. About 74% have calculated or are in the process of calculating their liability to report it on annual financial reports, up from 62% in 2009. Only 30% are setting aside funds to pay for future costs, down from 40% in 2009.

The study covering more than 1,900 city, county, township, and special district governments across the country was led by Cobalt Community Research, a nonprofit research organization based in Lansing, Michigan. More information is at www.cobaltcommunityresearch.org.