To the editor:
Wellmark Blue Cross and Blue Shield would like to ensure the citizens of Fort Dodge understand the facts of the Fort Dodge Community School District's decision not to continue with Wellmark health insurance coverage for its employees. Wellmark respects the district for doing its due diligence to ensure the district's funds are used in the most efficient and effective manner possible. Every business should take this step when spending money. However, it is important that the public know that the two proposals referenced in the Messenger News article regarding the decision is like comparing apples and oranges.
The Wellmark proposal referenced in the article was a renewal for a fully-insured business arrangement. In this type of funding scenario, the school district would pay a set premium each month for the contract of benefits it selects for its employees. Wellmark takes on all the financial risk of ensuring that the money collected in premiums will cover the cost of claims incurred by district employees. Wellmark has served the FDCSD for several years, so our proposal was based on long-term actual claims history with the intention of providing continuity of costs and therefore, solid budget planning for the school district.
The school board decided to go with a self-funded proposal from another company. With a self-funded arrangement, the school district is taking on more financial risk. This means if the health care costs exceed the available funds, the school district will need to make up the shortfall.
In addition, the administrative fees stated in the article, relative to Wellmark's fully-insured proposal were misrepresented as $2.2 million. The actual administrative fees in Wellmark's fully-insured proposal was $461,000. Unfortunately, we do not know how the actual costs from our proposal were presented to the school district because the Kansas City-based consultant the school district engaged to help them choose their health insurance plans never invited Wellmark to participate or be involved in any meetings with regard to Wellmark's proposal. This is unfortunate given it will mean a great deal of change for the health insurance recipients who will now be serviced by a company that is not headquartered in the state of Iowa.
Wellmark Blue Cross
and Blue Shield