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Cities in Connecticut band together in attempt to cut prescription drug costs

STAMFORD, Connecticut -- City officials are exploring ways to rein in soaring health insurance costs, including buying drugs in bulk with other Connecticut towns and sponsoring bus trips to Canada for retirees to purchase their prescriptions.

The ideas are part of an effort by the administration to avoid another 18 percent increase in health-care costs.

Over the past four years, the city's health-care costs have increased about 18 percent per year, rising from $12.8 million in 2000-01 to $21.3 million this fiscal year, according to Ben Barnes, director of administration.

"Obviously, everyone is struggling with health insurance costs these days," Barnes said. "No one is unique in that sense."

The city is self-insured, which means it regularly pays into a health-care fund, out of which payments are made for everything from employee checkups to major surgery. The city is insured against procedures that cost more than $250,000, Stover said.

Employee contributions, which also have increased sharply in recent years, are the other major component of the fund.

In response to these rising costs, leaders from a number of towns in Connecticut met in June to discuss the problem with representatives from the Connecticut Conference of Municipalities.

Connecticut Conference of Municipalities chose not to directly organize any effort. In recent months, however, Stover said Stamford has "picked up the ball." Stover and Mayor Dannel Malloy have managed to knit together a coalition of 11 municipalities that have joined forces to keep costs down, Stover said.

"It's starting to really pick up steam at this point," Stover said. "We're kind of the ones that are in the forefront on this one."

Prescription drugs are the fastest-rising portion of health-care costs, Stover said, and coalition members are looking to tackle that issue first.

"We decided it was time to talk about creating a cooperative of all the municipalities together and collectively bid out our prescription drug coverage as a whole," Stover said.

The coalition is trying to send out a request for proposals by the end of the year, hoping the competitive process will drive down the per employee cost for prescription coverage.

The communities in the coalition so far are Stamford, Connecticut; Danbury, Connecticut; Waterbury, Connecticut; Norwalk, Connecticut; Bridgeport, Connecticut; Manchester, Connecticut; Meriden, Connecticut; East Hartford, Connecticut; Winsdor, Connecticut; Winsdor Locks, Connecticut and Middletown, Connecticut Stover said.

The total number of people covered by the 11 Connecticut towns exceeds 60,000 people, Stover said, pointing out that coverage is extended to current and retired employees and their families.

"We're a pretty good-sized group," Stover said. The entire state of Vermont's heath-care plan covers about as many people, he said.

Stamford, Connecticut has between 4,500 and 5,000 people covered under its plan, including about 1,500 retirees and their spouses, Stover said.

Malloy said he thinks the effort could result in some significant cost savings for the city, especially if Connecticut Board of Education employees decide to sign on.

"We're trying to find a way to get some relief here, and I think, quite frankly, this is one of the ways to do it," Malloy said.

And if that doesn't work, Malloy has another idea up his sleeve.

"We're thinking about paying for bus travel for some of our retirees to go to Canada to buy their prescriptions," Malloy said.

It's just an idea, he said, and there are no concrete plans yet for such trips.

But the rising costs are such a drain on the city's budget that Malloy said he's willing to entertain any creative solutions to the problem.

"We're scratching our heads trying to figure out how to do it," he said.

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