The Bellone administration says $10.9 million in savings projected in the 2014 budget from the county's new prescription administrator will not materialize this year.
The shortfall was disclosed in documents last month associated with the county's $78 million bond borrowing. The disclosure comes as a new prescription administrator, Colorado-based Welldyne Inc., took over May 1 for the 48,000 workers, families and retirees covered.
All county unions, as part of a 10-year agreement under the Employee Medical Health Plan, must provide annual savings of $17 million, dating back to 2013. Much of the expected savings was to come from a requirement to order long-term prescriptions by mail.
The county disclosure statements blame the shortfall on delays in naming the new prescription drug plan administrator and implementation of changes to the county health plan.
Justin Meyers, Bellone spokesman, minimized the impact, saying the unions will have to come up with the savings through other steps, such as higher copays. "They have to come up with the savings no matter what," he said.
But Legis. John M. Kennedy Jr. (R-Nesconset), minority leader, labeled the purported savings in the agreement "speculative at best," and his office has gotten more than a dozen calls from union members complaining the transition from the old to new prescription manager has left employees "in a twilight zone." He also said the new mail order requirement "cuts right at the heart of local business," hurting local pharmacies that know customers best.
"We're getting no savings, diminished coverage and hurting local business," he said. "To me, that's a lose, lose, lose."
PBA president Noel DiGerolamo, co-chair of the union-management committee that oversees the health plan, called the county estimates overly conservative and expressed confidence unions will meet the needed three-year savings of $51 million. He downplayed service problems with the new provider and expects no need for significant benefit changes.
Under the agreement, officials said unions get credit for savings when local health costs come in below the Kaiser employer medical benefit survey index for the Northeast. DiGerolamo said the county also will see $5 million to $6 million in federal subsidies by joining the employee group waiver plan.
"We expect to reach the savings required and we have committed to making it up going forward if we don't," he said. If the county and the unions disagree on whether savings have been achieved, the issue goes to arbitration.
Suffolk last year named OptumRx to replace Express Scripts Inc. as the prescription drug plan administrator, but the county pulled back at the last minute because of a contract dispute and kept using Express Scripts Inc. Later, Welldyne was chosen from seven firms and took over May 1.