Clueless City Struggles With Health Care Costs


  • Top two rated insurance consultants replaced with the bottom two ranked consultants proving it pays to be last

  • Idiot city commissioner thinks a wellness program will reduce rates
  • The city’s PEPY health insurance cost is $12,000, double RBP rates in the area
  • Double digit rate increases every year mitigated by cost shifting
  • City’s 500 life health plan is fully-insured (WTF!)
  • City historically welded to status quo managed care plans because they believe in magic
  • City hopes changing insurance consultants will lower health insurance costs

City of Harlingen negotiating with insurance firm

By Fernando Del Valle – Valley Morning Star

June 9, 2022

HARLINGEN — Facing a jump in health insurance premiums, Harlingen city officials are searching for a new consulting firm after more than 10 years with a Dallas-based company.

Earlier this week, city commissioners voted 4-1 to enter into negotiations with Valley Risk Consulting, a McAllen firm, after reviewing presentations from three other companies.

In case talks fail, they agreed to negotiate with Barrett Insurance Services, a San Antonio-based company.

Commissioner Michael Mezmar cast the dissenting vote.

In making their decisions, commissioners bucked the recommendation of a committee made up of city officials which ranked six firms presenting proposals, giving HUB International Insurance, a Chicago-based company, its top grade, followed by McGriff Insurance Broker, the Addison-based firm which has handled the city’s employee health plans for at least 10 years.

During Tuesday’s meeting, commissioners reviewed presentations from Valley Risk and Barrett along with McGriff and HUB International.

During discussions, Commissioner Frank Morales called on officials to launch a wellness program for City Hall’s 500 employees, arguing it could help cut premium costs.

In response to the city’s request, Gallagher Insurance, Risk Management and Consulting Services in Austin and Cuellar and Associates of San Antonio also presented proposals.

On Thursday, city officials did not respond to a request to release the proposals.

Since at least 2013, the city had contracted with McGriff, which last year recommended commissioners select United Health Care as the city’s insurance carrier, dropping Blue Cross-Blue Shield after five years.

On consultant Scott Gibb’s recommendation, commissioners entered into a $5.39 million contract with United Health Care, up $790,000, or 16.8 percent, over the year before.

As part of the package, officials agreed to cover a $122,000 boost in employee contributions.

Under United Health Care, the city’s plan sets employees’ copay at $25 for doctor’s office visits while offering $10 copays for generic prescription drugs and 80-percent deductibles for hospital stays.

Commissioners agreed to drop Blue Cross-Blue Shield after it boosted its premium from $5 million to $6.14 million, an increase of $1.4 million.

From October 2020 through May 2021, the insurance plan’s loss ratio jumped 148 percent, far from the carrier’s 85 percent desired loss ratio.

Nearly every year, officials face climbing insurance premiums.

For five years, Blue Cross-Blue Shield served as the city’s medical insurance carrier.

In 2016, the city returned to Blue Cross-Blue Shield after contracting with other carriers for three years.

From 2012 to 2015, the city contracted with Valley Baptist Health Plans, which changed its name to Allegian in 2014, for its employees’ health insurance coverage.

City of Harlingen negotiating with insurance firm |