KINGSTON - Ulster County employees will pay twice as much in medical and prescription drug co-payments starting next year as part of a plan to save $2.5 million in mounting health-care costs and help alleviate the county's fiscal crunch.

Legislature Chairman David Donaldson announced the increase in co-pays from $10 to $20 for all active employees at a news conference Tuesday at the County Office Building. The increase applies to all county employees, though managers still can recoup much of the expense through the County Plus Plan. Employees covered by MVP will not see a change in prescription co-pays.

Inpatient service co-pays also will be applied to health maintenance organizations, with the highest at $500 for CDPHP and MVP 20. However, Donaldson said employees will not see a change in net cost for inpatient services because the county plans to reimburse employees.

Donaldson, D-Kingston, said a hardship fund will be established for union members who cannot carry the added expense, but he said the details are yet to be worked out. He said employees who contribute 15 percent toward their health insurance will see a savings in their contribution because the increases will lower the overall cost of the plans.

The county's 358 Medicare-eligible retirees, meanwhile, will be required to apply for Medicare and use the county's insurance as a supplement. Donaldson said the change structures the process the way it was designed to run and saves the county $800,000 without reducing the quality of retirees' health care.

The changes, which take effect Jan. 1, 2007, mark the first time the county has reduced overall health costs, Donaldson said. Health insurance cost the county $18.5 million this year and was estimated to rise to more than $20 million in 2007. With the changes in co-pays and deductibles, the county is looking at an overall cost of $17 million next year.

"This is similar savings to having 100 people laid off," said County Administrator Michael Hein. "This kind of thing can save jobs and really protect the property owner, which is our real goal."

Even so, Donaldson still expects layoffs after the county 2007 budget is released Oct. 19. He said health-care cost reductions will shave 4 percentage points off an anticipated 30 percent tax increase for 2007.

DuMond said that if county officials had acted immediately when union representatives approached them with the issue of mounting health-care costs more than a year ago, they would have been able to save millions without burdening employees.

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