LOCKPORT – Most of Niagara County’s 21 local governments were represented Tuesday at a meeting to hear about the possibility of joining into a single health insurance consortium in hopes of eventually saving money.
The push came from the town supervisors, who have been discussing the matter for the past several weeks, Wright H. Ellis of Cambria, president of the Niagara County Supervisors Association, said at the meeting in Lockport Town Hall.
But the fate of the idea may lie with Niagara County government, since state law requires any health consortium to have at least 2,000 insured employees.
Without the county, Somerset Supervisor Daniel M. Engert said, the others might not be able to make the required threshold. “It’s close,” he said.
“We want to do what’s best for the community. That’s a fair assumption,” said County Legislature Majority Leader Richard E. Updegrove, R-Lockport. “But every entity is different.”
And those differences are among the challenges laid out by Tuesday’s presenters, four executives from Arthur J. Gallagher & Co., an insurance consulting firm that hopes to be hired to perform a feasibility study.
“It’s going to take time. It may take years,” Michael Martone, Gallagher’s area president, told the group, which included representatives from 10 towns, two cities, three villages and the county.
Martone said it took his firm six years to work out a health insurance consortium among 19 Monroe County school districts, with a total of 16,000 insured people and 130 different union contracts.
The feasibility study itself may cost $3,000 to $5,000 per entity, said Ben Lewis, a Gallagher underwriter.
He also warned that every member will have to chip in to create an insurance reserve fund, and that contribution “can be sizable.”
For tiny municipalities, the entry costs might be too much. “If you have a small village, would the costs of joining this be more than the cost of buying insurance yourself?” asked Greg Kerth, a Village of Barker trustee.
Barker Mayor Aaron S. Nellist said Barker has a 12-person payroll and spends about $1,900 a month on health insurance.
“The big hit is the feasibility study, but on the other hand, we had a 23 percent increase in health insurance last year,” Nellist said.
For bigger players, the notion of a large self-funded insurance pool may have more appeal. “We don’t feel we have much control over our current health systems,” said Marc R. Smith, Town of Lockport supervisor.
At present, Tompkins County has the only countywide health insurance consortium in the state, but Engert said because of its enhanced buying power, its health premium increases in the last three years have been well below what members would have experienced on their own.
Charles McLaughlin, a Gallagher vice president, said state law requires union representation on a consortium’s governing board.
Engert said the towns already have issued a request for proposals for a feasibility study, with the responses from consultants due next Tuesday. He urged interested communities to pass resolutions of willingness to join in the study by mid-July.
Martone said the terms of the actual health coverage need to be worked out before the consortium is formally created.
“Is it daunting? Is it a lot of work? Yes, but it can be done,” Martone said.
“You need to think about this long and hard,” said Maureen Pelose, another Gallagher vice president. “You need good leaders.”