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BOARD OF EDUCATION APPROVES CAREFIRST HEALTHCARE CONTRACT THAT WILL SAVE $16.9 MILLION OVER 3 YEARS

The Board of Education of Anne Arundel County today unanimously approved a new healthcare contract with CareFirst that will save the school system $16.9 million over a three-year period beginning in January 2018.

School system officials and consultant Aon Hewitt negotiated the new contract with CareFirst over a period of several months to garner more favorable pricing for prescription drug benefits and stabilize administrative fees. The contract also maintains Wellness Program support and the Employee Assistance Program at no increased cost.

The move is the latest in Anne Arundel County Public Schools’ efforts to contain and reduce healthcare costs as the school system grapples with a multimillion-dollar structural deficit in its healthcare fund. The deficit has come about due to rapidly rising costs of prescription drugs and medical care, increased enrollment of AACPS employees, retirees, and dependents, and prior decisions by the county to redirect funds to other areas of the school system’s budget.

AACPS changed the prescription co-pay structure for retirees in January 2016 and did the same for all non-represented employees in July 2016. The school system has yet to come to an agreement with any of its four employee bargaining units on changes to the healthcare plan.

Last spring, AACPS and County Executive Steve Schuh argued for and were granted the ability by the Maryland State Department of Education to apply $10 million outside of Maintenance of Effort funding requirements in order to help partially stabilize the fund this year. Despite that assistance, the fund is still projected to be depleted by the end of this fiscal year.

“The Board recognizes the need to make changes to our healthcare fund if we are to eradicate the hole in which we currently find ourselves and restore the fund to solid footing,” Board President Stacy Korbelak said. “These changes are not easy and there is still work to be done, but Dr. Arlotto and his staff deserve a lot of credit for negotiating a contract that will bring about substantial savings over the next few years.”