School district and state employee health plans: is change needed?

School district and state employee health plans: is change needed?

by
IFF
February 13, 2010
IFF
February 13, 2010

A review of school district health programs shows wide variances in what taxpayers are paying to buy health insurance for public employees across the state and even in neighboring school districts. The reason: districts are buying into plans with bells and whistles, such as extremely low deductibles or no deductibles at all, that would cost much more if bought by individuals.

For instance, as one travels from the Nampa School District to the Meridian District to the Boise District, premiums increase from $405 to $425 to $495 per month respectively, even though the Meridian district is the largest in the state. In theory, because of its larger size, Meridian should be able to negotiate lower premiums than what taxpayers pay in neighboring Nampa. In North Idaho, the Coeur d’Alene school district fully funds an individual full-time employee’s monthly premium of about $316 per month, but at the neighboring Post Falls district, taxpayers pay $394 a month per employee for similar coverage.

Different plans, different coverages

“What neither of those numbers tell you is what their plan is,” said Mike Friend, Executive Director of the Idaho School District Council, an organization that plays a purchasing agent role for many of Idaho’s school districts. The Council helps smaller districts particularly by helping them pool together to buy everything from supplies to health insurance. “Yes, there are variations. The decision gets made at the local level (by the district insurance committee) and the school board is really the one that takes those recommendations and says yea or nay, depending on what their budgets allow them to cover.”

A lot of that depends on factors such as deductibles. Sara Pickens, with the Coeur d’Alene School district, said the district offers two options to their individual employees. “Our base plan has a $200 deductible, and then there’s a plan with no deductible. If (the employees) opt to go to the no deductible plan, they pay the difference between the two premiums ($351 for no deductible, $316 for the base plan).”

So why is coverage almost $80 more per month in nearby Post Falls School District? Sid Armstrong is the Business Manager for the district, and serves as the facilitator for the insurance committee. He said the process begins with deciding what kind of coverage the committee wants -- including decisions about how high the deductible should be, what co-pays employees should pay and what kind of emergency coverage is offered.

Post Falls School Board Chairwoman Donagene Turnbow said the school board has tried to hold down costs, including providing incentives to encourage employees to stay in network and find cheaper solutions to health issues, and high co-payments for brand-name drugs. The IFF tried to contact Turnbow by phone to ask her about the variance in premiums between her district and neighboring Coeur d’Alene district, but got only an e-mail in response.

But Friend says he doesn’t think school districts can continue offering the plans they have, especially as rates continue to climb. Friend, who is also personnel director for the Middleton School District, said local school boards "have to make determinations, because they have a finite amount of money coming in, and trust me, we hear the taxpayer cry and we understand that.”

Likewise, Sid Armstrong says members of his committee know the taxpayer is hurting, too. “I think there’s pretty much a mindset of ‘these costs have to be controlled’. We’re not going to get a better deal so, we’d better control our costs as best we can or we’re going to be looking at less coverage, so to speak.”

One possible option

So if the status quo needs to change, what are the options? Rep. Steven Thayn (R-Emmett) says he has an idea. It involves taking insurance completely out of the workplace, not just for school districts, but for all state employees. “For example, the state legislature is receiving health benefits. Why don’t we give the state legislators, or teachers, or state employees the money that we’re spending on their healthcare, and let them go out in the private sector, buy a high-deductible policy and put the rest in a Health Savings Account, so we bring some market forces back into the medical industry? That’s one of the main things driving the increase in medical costs.”

Thayn says increases in medical costs drive up health plans, and it’s pushing the overhead for employee medical coverage to the breaking point. “We either have to limit coverage, do away with insurance coverage altogether, or find something more creative. What we’re doing isn’t going to work; we have to make those changes.”

But the whole key, he says, it to give each state and school district employee an incentive to stay healthy, and not go to the doctor as much. “I think if we start getting the people involved in holding down the cost, because that’s what really driving the cost of an insurance policy, is the cost of medical care is going up. And until we do something to incentivize people to want to stay healthy, and reduce the number of procedures they’re receiving, the cost of medical care cannot go down, and therefore the cost of health insurance can’t go down.”

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