Health insurers are attracting local governments with promises of cost control on medical benefits, but unexpected fees often negate those savings, leading to substantial budget overruns.
In places like Shelby County, Tennessee, one insurer's administrative charges skyrocketed to $1.3 million last year, more than the budgeted amount for long-term disability insurance for all employees.
In Hoboken, New Jersey, the charges from insurers for managing these programs have been so excessive that they sometimes outpace the payments made directly to doctors for treatment.
A review of public records revealed that local governments across the country are unknowingly feeding a lucrative revenue stream for some of the largest health insurers due to unanticipated fees.
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