Allegheny County Executive Rich Fitzgerald lobbed the health insurance coverage of the county’s 6,700 employees and their families as the latest salvo in the war between Highmark and UPMC.
Fitzgerald announced on Tuesday that the county would stick with Highmark Blue Cross Blue Shield exclusively regardless of what happens between the health care giants. The agreement means that if UPMC wants access to the approximately 15,000 people insured through the county’s health care program, it will have to negotiate a resolution with Highmark.
The tactic may not be as successful as Fitzgerald hopes, health care consultants said.
“Isn’t UPMC faced with that already?” said Tom Tomczyk, a principal in the Downtown benefits consulting firm Buck Consultants. “The fact that Allegheny County said we’re not going to have access to your system and we’re OK with that, that’s what Highmark wants to do anyway.”
UPMC spokesman Paul Wood had no comment.
The county’s health plan through Highmark allows employees and their families to use doctors and facilities in both hospital systems. UPMC has refused to negotiate a reimbursement contract with Highmark because the insurer operates a rival hospital system, Allegheny Health Network. The contract expires Dec. 31.
The Service Employees International Union, which represents more than 1,000 county employees working in health and human services, the courts and the 911 dispatch center, said Fitzgerald’s announcement was a “major step forward” for employees and taxpayers and encouraged other employers to “follow the county’s lead,” according to a statement from the union.
Jim McTiernan, a health care consultant with Triad Gallagher, said he doubts most employers are ready to commit to one company.
“It’s an interesting message to send your employees,” McTiernan said.
Highmark will discount the county’s premium payments and administrative costs by $10 million in both 2014 and 2015, Fitzgerald said.
The county pays about $80 million a year in premiums, he said — about 10 percent of the county’s $817 million operating budget.
Coverage for employees will not change.
The county selected Highmark over Aetna and UPMC in December 2012 to be its health care provider. The four-year contract contained provisions allowing the county to drop Highmark at any time after a 30-day notice. The agreement removes the county’s ability to drop Highmark until after Dec. 31, 2014, said county spokeswoman Amie Downs.
Former county Executive Dan Onorato, now an executive vice president with Highmark, attended the announcement on Tuesday. He did not speak at the event or return calls for comment later in the day. Aaron Billger, a Highmark spokesman, said Onorato does not negotiate contracts and was not part of discussions surrounding the agreement. Onorato works in government affairs and attended the announcement because it involved a local government, Billger said.
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