By Jennifer Grimes

Triplicate staff writer

A breakdown in contract talks between Del Nortes only hospital and Blue Cross Insurance, held by many residents here, is about to send health care costs skyrocketing.

This will have a major impact on us, said Lt. Ben Grundy, Pelican Bay State Prisons information officer.

All 1,400 of the prisons full-time employees are covered under Blue Cross. The Del Norte County Unified School Districts 537 employees also use Blue Cross, as do 60 of the City of Crescent Citys employees and their families.

Without knowing the exact impact of the failed negotiations, City and prison officials say they arent sure how to proceed.

There are still too many unanswered questions, said City Manager Dave Wells.

Sutter Coast Hospital is an affiliate of Sutter Health which owns 26 care centers throughout central and northern California.

John Menaugh, CEO of Sutter Coast, said Blue Cross has not been treating the hospital fairly. Blue Cross has disputed or delayed millions of dollars worth of payments to Sutter hospitals and physicians, reads a statement by Sutter Health.

Efforts to reach Blue Cross were not successful.

The contract between Blue Cross and Sutter Health ends Dec. 31. Negotiations for a new contract have been going on since June.

We simply can no longer afford to be a party to contracts that provide us with less than fair and equitable reimbursement, said Bill Gleeson, of Sutter Healths headquarters in Sacramento.

At this point were not hopeful, Gleeson said. The last meeting with Blue Cross was on Friday, and that ended with us leaving still very far apart, he said. No more negotiation meetings have been scheduled.

Technically, several different contracts are in play. One affects the Blue Cross Health Maintenance Organization, whose members reside in other regions. Sutter Health has decided it will not honor those policies in the new year.

Locally, the prison, California Highway Patrol, the school district and the city depend on Blue Cross PPO programs, technically a different contract but one still affected by HMO negotiations.

We will still accept Blue Cross PPO patients, but it means their out-of-pocket expense will be greater, Menaugh said. But how much more will not be clear until after Dec. 31.

Karen Plechaty, whose husband is a counselor at the prison, said her deductible has gone from $500 to $1,000. She said her familys out-of-pocket expenses have also doubled. If thats too much, theyll have to seek services outside the area, Menaugh said. We hope local agencies will switch their insurance because of this, he added.

Gleeson emphasized patients needing care will not be turned away because of insurance, but they will have to pay the price.

When asked how this lag in negotiations will affect the local hospitals economic stability, Menaugh said: There will be some short term impact. He said he is not fearful of financial failure, however, because parent company Sutter Health can cover costs.

We have agreed to some transitions. People who have previously scheduled surgeries and appointments through January will still be seen, Gleeson said.

Sutter Health has a hotline to field questions about their coverage at 1-800-720-7655.