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Health care cost ‘big unknown’ for cities

Profile image for By John D. Harden / Staff Writer
By John D. Harden / Staff Writer

Officials in some of the area cities are expecting to see a significant spike in health care costs for their employees, and they won’t know exactly by how much rates may increase until late into the 2013-14 budget process.

Many aspects of the federal government’s Affordable Care Act are scheduled to take effect in 2014 and officials say these new requirements will raise the costs of providing health insurance to their employees.

But a few officials said there may not be any significant increases in the first year of the implementation.

The discrepancies among cities on how health care costs will affect their respective budgets illustrates the uncertainty they have expressed.

Several finance directors have referred to the cost of health care as the “big unknown.”

Some officials say they expect to cover most of the costs and anticipate that their employees must cover the rest, according to proposed budgets.

For instance, in Sanger officials added an extra $650 for each employee in addition to what they were already paying.

However, the proposed budgets are only estimates and can change, officials say.

“We don’t have those figures yet,” said Donna Boner, Lake Dallas finance director.

President Barack Obama’s administration has pushed back the dates for implementation of the Affordable Care Act and that’s leaving many cities in the dark on how much to budget for health insurance.

Beginning in 2014, the act requires U.S. citizens and legal residents to obtain health coverage or pay a penalty. The law also requires state Medicaid programs to expand eligibility.

One of the reasons for the delay is a result of some states, including Texas, opposing federal plans to establish a marketplace for health insurance, according to a White House press release.

The marketplace is a type of network where people can shop for medical coverage. Federal officials stated in the release that if states don’t create a marketplace, they'll get a one-size-fits-all plan instead.

Texas Attorney General Greg Abbott said in a prepared statement that he’s unsure if and how Texas will set up the marketplace, but it will have to be hammered out in the coming weeks and months.

With the exception of health care costs, some of the area cities’ budgets are beginning to take shape, and for another year, officials are expecting revenues and expenditures to look similar to the current fiscal year.

Many area cities have experienced higher than expected budgeted revenues, and they’re using the extra funds to begin replenishing their reserves, which most cities dipped into following the peak of an economic slump a few years ago.

In Sanger, officials said that they anticipate at least a 5 percent increase in the property tax revenue based on new construction.

Revenue appears stronger than it has in years, City Manager Mike Brice said.

But again, officials want residents to know that the budget estimates are not definite. Cities are still waiting on more concrete numbers on sales and property tax revenue values before setting their budgets in stone.

“We are waiting to firm things up when we have certified values,” said Kim Collins, Argyle finance director.

JOHN D. HARDEN can be reached at 940-566-6882and via Twitter at @JDHarden.