Budget takes hit thanks to insurance
Lake County Board backed into corner by jail medical provider
The Lake County Board of Commissioners approved a contract renewal worth millions of dollars for the jail’s medical provider, despite concern that the 2021 contract is approximately $1.7 million more than this year’s.
In a 2-1 vote, the commissioners approved to renew a contract with Correctional Health Indiana Inc., CHI, for jail medical services worth approximately $6.6 million with a contingency that the Lake County Sheriff ’s Department and the Lake County Council is able to pay for the contract.
In a statement, Lake County Sheriff Oscar Martinez said in September CHI “explained that they are anticipating their insurance premiums for liability would increase dramatically because several carriers were getting out of the corrections medical business.”
Commissioners’ attorney Matthew Fech, who worked on the contract, said CHI told the county that securing liability insurance for jail medical services has been a challenge in the last year.
“This is a market price situation that CHI has no control over,” Fech said. “The significant increase is the large increase in his insurance premium.”
In 2020, the sheriff ’s department paid approximately $4.9 million for CHI services, according to county records. For the 2021 budget, the sheriff ’s department budgeted approximately $5 million, Fech said.
In September, CHI notified the county that its insurance premium will increase by $250,000, Fech said. On Nov. 30, the contract came in and when accounting for all liability costs, the 2021 contract totals $6.6 million, according to county records.
When the $6.6 million contract came in, Martinez said in the statement that sheriff ’s
officials and CHI developed three options: CHI continues with the same coverage and the contract increases to $6.6 million; the county would assume a small part of the liability and CHI would maintain insurance on the majority of claims, which would cost $5.8 million; or the county would assume all liability for any losses and claims against CHI for providing services in the j ail , which would be $500,000 below budget.
Fech said he did not recommend the third option to the commissioners because “it would expose the county to the risk of significant liability.”
The jail has to provide medical services to inmates and the county believes in “CHI obtaining their own insurance,” Fech said, so the commissioners ultimately approved the $6.6 million contract on the condition that the council and sheriff ’s department pay for the increase.
“We developed language (in the contract) that not only included appropriations from the council, but also transfers of available funds within the sheriff ’s budget to cover the costs as well,” Fech told the commissioners.
Commissioner Jerry Tippy, R-2nd, voted against the contract because of the cost increase.
Tippy said he’s been told the contract increased because of insurance costs going up.
“We receive all this information in November and we have very little time. I believe there were alternatives a n d we could’ve looked into it, but we just didn’t have time,” Tippy said.
Commission President Michael Repay, D-3rd, said he was “disappointed” that Martinez did not inform the council about the insurance increase sooner.
“This is the largest contract he has,” Repay said. “He waited until the last second to present this meanwhile spending his budget.”
At the end of the meeting, Chief of Police Vince Balbo asked the commissioners to “take from the table” the nine purchases the department filed that have been deferred since November.
The purchases are “essential to the administrative and enforcement operation” of the sheriff ’s department, Balbo said.
The meeting ended without the commissioners discussing the nine purchases. Repay said that “the lack of emotion from my colleagues” to open the discussion prompted the meeting to end, as scheduled.
The commissioners and council are in the midst of a lawsuit that will, ultimately, decide who has authority over purchasing. Repay said that is a large reason why the purchases have been deferred since November, when the lawsuit was filed.
“We’ve made all the statements we can with regard to that,” Repay said.