Miller: Surge in claims sunk town school budget

Miller: Surge in claims sunk town school budget

LINCOLN - School Business Manager Lori Miller told School Committee members Monday night that health insurance claims for employees and families continues to climb, leading her to predict that a nearly $1 million increase to $6.2 million is possible next year.

No matter what, she said, she's "confident" the amount of claims will exceed the upcoming year's budgeted amount of $4.3 million.

Miller was speaking at a special school board meeting Monday called to discuss the current year-end deficit.

When town officials reviewed the school department's $757,000 deficit last week, they wanted answers on why the line item for medical claims was reduced from $3.9 million to $3.2 million.

To clarify, Miller said the funds were distributed to other line items within the health insurance umbrella, making it seem like the budget was reduced by $700,000.

In reality, she said, she revised the medical insurance line item to $3.2 million for active employees, $550,000 for retirees and $150,000 for health premiums.

"So the number is still there for all the claims and if you just take all those numbers and add it up you'll get the $3.9 million. It's just distributed a little differently so there was no game playing or some kind of change; we do this every year," she said.

The main reason for the school department's year-end deficit, she said, was the increase in medical claims between 2013 and 2014.

Miller said in 2013 the department budgeted for $4.8 million, which was cut to $3.9 million because of the $800,000 surpluses they continued to accumulate.

But after multiple claims ranging between $80,000 and $100,000, the school department leaders realized the budgeted amount would not be enough for this year.

Miller said each month she receives a report with the claim amounts and between August of 2013 and November of 2013 the claims were low.

"I said I was feeling it might be OK. Well it went up, and then it went way up in April and May, and now June is just one week at $97,000. You have better odds in Vegas trying to predict what these numbers will be," she said.

Currently, she said, there are six claims and several are between $85,000 and $90,000 per claim.

"You don't know from year to year what these claims will be and it's not just the subscribers, it's the spouses and children," she said.

Miller, who broke down the history of the claims for the School Committee, said from April 2012 to March 2013 the total net paid claims totaled $4.2 million; from April 2013 to March 2014 however, the total net paid claims totaled $5.3 million.

If the trend remains, she said, next year's total net paid claims could amount to $6.2 million.

"I was very concerned about this. I don't think this is a spike, I think this is the new normal based on what I know about the claims. The budget board doesn't want to give us money for things that may occur, which I understand, but I think we have to be realistic. For me, I'm confident we'll overspend in this line again next year," she said.

Committee member John Lafleur asked Miller if the high amount of step 10 teachers in the district correlates to the increase in medical claims.

"Are we looking at a population in Lincoln of teachers that are so well established that we're talking about bigger families, more children?" he asked.

Miller said the amount of people on the plan is factored into the budget, "it's just really bad, weird stuff that has happened to people."

School Committee Chairwoman Kristine Donabedian said when the committee deliberated the 2014 budget they did so based on the fact that they accumulated surpluses in previous years.

"I don't think it defies logic to take the position we did by reducing that line. That shouldn't be a surprise to anybody that we did that," she said.

She said administration officials have to investigate a way to project the claims in order to stop the deficit surprises.

"Speak with the consultant on a monthly basis or quarterly basis," she told Miller. "We should work on that over the summer because we'll be talking about this next year and it'll be a more significant discussion because the surplus will be gone."

Comments

"I said I was feeling it might be OK. Well it went up, and then it went way up in April and May, and now June is just one week at $97,000. You have better odds in Vegas trying to predict what these numbers will be," she said.

So much for zero variance. Budgeting by feel.

Its so refreshing to hear a School Business Manager tell it like it is. In fact, there is NO WAY to predict a health care budget -- it would be like being able to predict which employees and children covered by the town's/school's plan are going to get seriously sick over the coming 6 or 12 months. No one can predict that and it does require some "feel" in order not to get totally taken advantage of by the health care system in terms of cost... Looking at PAST experience is NO indicator of future expense. I really like the way she's continuing to break the budget items out so the town has more transparency to where the expense is actually occurring and is closely monitoring monthly variance. She has given the school committee the opportunity to execute good governance over the budget and move money around as required to meet the important commitment to healthcare. Cheers Ms. Miller! - Joe

I could not agree more. Lincoln is lucky to have such a hard working, dedicated School Business Manager that tells it like it is. I applaud you Ms. Miller!

I seem to remember John Tindall-Gibson tried to remove Ms. Miller, and when he could't make that happen he quit.

Good news for Ms. Miller and others who tirelessly work to do the right thing and then are anonymously and publicly harassed. On June 20, a new law was enacted in RI that will allow for the prosecution (felony) of anyone who posts messages, using someone else's name, with the intent to harm. Check it out. In addition to being a seasoned professional, I seem to remember that Ms. Miller is also an attorney...It will be interesting to see the first case come forward...

See folks this is how they do it in the Lincoln School Department, If you question anything, they will try to harass and intimidate you.
Citizens have a right to question how there tax dollars are spent.

See folks, to be clear, if you harass individuals through innuendo and false / non-factual statements that won't hold up under the scrutiny of the law, then you do have something to worry about now. Its like a personal hate crime kind of thing where an individual is targeted and harassed. Its not intimidation, its the LAW and its what the people of the state decided to enact based on the fact that we also have an Open Meetings law where anyone can make their sentiments known but NOT ANONYMOUSLY. The "more" good news is that the majority of us didn't need this law to behave well! Cheers to transparency!

I fully agree. The law is a good one. Who wouldn't support the elimination of anonymous sniping? It doesn't help us solve the town's challenges. If you have an issue with the town then write a letter and sign your name to it. Otherwise, please go back under your rock!

You have to love it when anonymous posters tell other anonymous posters how to behave. If I have made any false statements please feel free to correct me.
If you want to be above reproach don't blow your budget by 3/4 million dollars.