City council gets update ahead of health care renewal

Representatives from M3 Insurance attended the Aug. 25 city council meeting to talk with the city about the upcoming renewal of health insurance. Advances in technology, an aging population and pharmaceutical advancements have created the continued increase in health care costs, said Rebekah Johnstone of M3 Insurance.

“Just looking within the market, around Rhinelander and your neighboring towns, the provider consolidation has been an issue,” Johnstone said. Aspirus, she said, had purchased seven hospitals and 21 clinics. 

She said provider costs had also increased, she said. Looking at conditions, she said, 60 percent of Americans now live with a chronic condition, but those with more than chronic conditions have risen sharply, to 42 percent, which also brings up the costs of health care. With this in mind, she said, many employers were looking at becoming self-funded as far as health insurance was concerned. For that reason, M3 wanted to bring that option to the city to consider as well.

“One way to look at becoming self-funded, which a lot of employers are doing today, is making sure that we can bring your claims down,” Johnstone said. By bringing overall costs down, more favorable options would be available. She said it would also depend on what the city was comfortable with when it came to health care.

“There are so many options out there in the market when we think of -do we just go give money to go find health insurance?” she asked. “But then that means you’re not offering group coverage, so when you’re trying to retain employees, that may not be perceived well.” Another option, she said, was to be fully insured, which is currently the model under which the city was operating. 

“But then we take a look at other options, because, again, we try to do a little better,” Johnstone said. “We want to be better healthcare consumers.” In doing that, she said, the long-term goal was to look at being self-funded. When looking at being fully funded, the city’s hands would be tied as far as what is out there in the market. She said it was 3M Insurance’s job to listen to what the city wanted to do, look at their claims and guide them through the process, letting the city know what it might look like. 

Looking at claims, including some of the more expensive drugs that are on the rise, Johnstone said 3M did not feel this was the right year for the city to make the move to being self-funded, but the idea was to help the city look at how to approach claims to become more of a health care consumer and look more toward the long term of becoming self-funded and how they would get there.

The fully insured renewal for 2026, Johnstone said, looked better than the self funding option at this time. 

“That renewal would be a double digit, just based on the loss ratio that’s coming through, but we will take it to market, we will also bring over plan design considerations on ways we can keep the renewal more manageable and not put so much onto the employee.”

Council members were provided with a self-funding analysis. The fixed costs, Johnstone said, including items such as administrative fees and risk insurance would come to $633,560. She said M3 projected the city’s claims to come in just over $1.1 million, with the M3 projected self-funding cost as a whole being approximately $1.8 million. 

“At this time, again, with the increase ranging from 29-46 percent, so, worst case scenario, it would be 46 percent, at this time, for 2026, self-funded does not look like the best option,” she said. 

“What Bekah is saying is, it’s kind of like car insurance,” John Pruess from 3M Insurance said. “If you have a lot of speeding tickets, if your claims are really high, your premium goes up. Your claims are higher than what you’re paying in, consistently over a period of years.” The goal, he said, would be to get the claims down and to be able to get competitive bids. While people needed to go to the doctors and to seek treatment for things, he said the best way to manage claims was for people to be healthier in the first place. Shopping for care is another way to help manage claims. The council was provided a packet with information on an app, offering an online option for employees to do thing such as talk to a doctor to get a prescription refilled. The app would also allow employees to shop to see the difference between two doctors, for example. Once the claims had been brought down, through a number of mechanisms Pruess reviewed, he felt the city should consider self-funding in 2027. 

“We’re still going to shop out your insurance, but unless we get your claims down, this is a game we’re going to continue every single year, so we think the answer is to work with you to help manage claims,” he said. He said he would also look to start a wellness group at the city to help take care of the health and wellbeing of employees. 

Looking at the app, Pruess said, it was a $10,000 investment. However, he projected, in just the first year, it would bring a $32,000 return on that investment. While that was not a large return, he said, but everything related to the city’s benefits would be housed on that app, and it had worked well in other instances for other entities. 

Johnstone said 3M should be receiving the Aspirus renewal next steps within the week. From there, 3M would come back with what options they had received and talk more about the wellness program. They would also look to keep that conversation and monitoring open throughout 2026. By the end of September, she said, 3M would look to meet with the city on the options they would be proposing. Open enrollment, she said, could begin in November, giving employees time to review their options.

Mayor Kris Hanus asked to learn more about the self-funding option from a liability standpoint. Johnstone said, with self-funding, the city would have more ability to create a better plan design, choose to cover certain conditions and to find vendors who may help with high-cost claimants as well as to source out prescriptions at possibly a better cost. Being self-funded, she said, would also allow the city to partner with primary healthcare facilities like Novia, which had recently come into the Rhinelander market. These partnerships often allow for high quality, lower cost health care options. 

“I’m more looking at, what’s the liability to the city as far as what could go wrong,” Hanus said. 

Johnstone said one thing that could go wrong is if the city failed to fund its plan. The stop loss per person would still protect the city, but if the stop loss carrier was reimbursing the city more than they were paying in, renewal costs could be higher. Also, there was the management of the plan as well as the needed additional reporting. This item was presented as information only.

Provisional liquor licenses

The matter of a provisional liquor license came back for a second reading and possible approval during Monday’s meeting. 

A provisional liquor license would allow a business to apply for a provisional liquor license that would be valid for up to 60 days prior to having a facility completed that could be inspected. This matter came up for a business, Rosati’s Pizza, that is currently building in Rhinelander. With limited liquor licenses available within the city, the business wanted assurance that, upon completion, a license would be available for purchase. This resolution would allow for that assurance. It would also allow for an instance where a new owner of a business could purchase remaining, unopened liquor stock from a former owner, for instance. In order to sell liquor, however, the establishment would still have to hold a full liquor license, which could be approved by the city council once the building was completed and an inspection passed. The city council unanimously approved the passing of this resolution.

Beckie Gaskill may be reached via email at [email protected].