Health Insurance Drags Down Cities

Jul 14, 2011

The cost of health care threatens to break the finances of cities like Lexington.  Last year, providing coverage for city worker cost 11-million dollars more than predicted.  Other cities are in better shape, but, the executive director at the Kentucky League of Cities says it’s still a struggle. Jon Steiner says increasing health care costs makes it hard to write a budget.

“So the costs are also escalating and they are in and out the door so they are very expensive and health insurance and salaries are major parts of city budgets because cities are really run by people,” said Steiner.

High costs may force officials in other Kentuckycommunities to reset priorities.

"There’s only so much money to go around and if it’s spent on salaries and health benefits that takes away from parks and re-surfacing and other things that cities spend money on,” said Steiner.

Steiner says employees in many cities have been asked tocontribute more totheir monthly premiums.  In some cases, he says cities cancover part or all of the higher deductible costs.  Steiner says about a third of Kentucky cities buyhealth insurance through the League of Cities.  He says other city officials go through a state-sponsoredprogram, private firms, or are self insured.