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Monday, September 9, 2013

Searching for a 'fix' for Arkansas teacher health insurance

Posted By on Mon, Sep 9, 2013 at 9:47 AM

click to enlarge GATHERING STORM: Big crowd for teacher insurance discussion. - AFP ARKANSAS/TWITTER
  • AFP Arkansas/Twitter
  • GATHERING STORM: Big crowd for teacher insurance discussion.

A big crowd has gathered at the Capitol this morning so that legislators may demonstrate their concern for aggrieved public school teachers facing enormous health insurance rate increases. The situation is aggravated by greater state support and lower cost for the state public employees insurance plan. Public employees apparently are healthier. They have a better loss ratio currently, which produces surpluses that further subsidize their premiums. The teachers' reserve was wiped out by catastrophic claims.

I await with interest a "fix" for teachers that doesn't require more money or less coverage.

If I were a teacher, I wouldn't be looking for more money from the Republican legislature.

Stray thought: I wonder if the new health exchanges might lower the cost of  insurance — even for a non-subsidized customer — in some cases? In the next week or so, consumers are supposed to get the first look at the exchange rates.

Single-payer health insurance. Expand Medicare for all. Those are solutions, if in political fantasyland.

I wish they'd televise some of these interim committees.

Sen. Jason Rapert is riding this horse hard, saying he'd have a special session to address it. 

Here's the information packet provided legislators. 

There's a further explanation of rate differentials here

It's been estimated that it would take $60 million to equalize the state employee and teacher coverage. Legislators have complained that school districts aren't required to spend the money they receive in support of teacher insurance on insurance. True, but they are spending more than $55 million of the $59 million received. So reallocating that money won't go far toward solving the problem. There are 50,000 teachers and other covered employees in the system, plus 30,000 dependents. Recouping the $3.6 million a year NOT going to insurance would only put about $70 more per year into each covered employee's insurance, on average. A quick scan of the figures indicates the smaller school districts are redirecting some of the insurance money to other purposes, perhaps to meet salary minimums for starters.

As testimony continues, remarks begin about unsustainability of the "gold" insurance plan, the one with no deductible. Yes, a reduction in benefits is one obvious way to save money.

UPDATE: On the jump, Benjamin Hardy of Legislative Digest provides a summary of events as of 2:30, when testimony was still going strong:

The Health and Insurance Committees convened at 10 AM today to discuss the convtroversy over skyrocketing insurance costs for public school employees. This committee room is as packed as I've ever seen it — standing room only, and after a recess for lunch Capitol security placed an apologetic note on the door saying that admittance would have to be limited. Sen. Rapert, chair of the Insurance Committee, opened the meeting this morning by saying he's received more emails about this issue than any other during his time as a legislator (considering the issues he's championed, that's saying something). Rapert also said that he has written a letter to the Governor's office expressing his support for convening a special session, if needed, to come up with both emergency fiscal relief and a longer-term solution.

Apparently, the bulk of the folks in attendance are employees from Green County Tech, a district near Paragould, clad in green and gold school spirit shirts. They're not happy. The district made the decision to close its doors today — in exchange for adding a day to the end of the school year — so that employees could be in attendance. The Green County superintendent, Jerry Noble, has been a vocal proponent of demanding a fix and is testifying this afternoon. He has some scathing words for the Employee Benefits Division (EBD), which announced the hike in teachers' rates two weeks ago. Noble implied that EBD is somehow using the increase in teacher rates as a means of suppressing potential rate increases in the state employee insurance system, although he qualified that this is "speculation".

There is a good deal of finger pointing happening in testimony, though tempers are dampened by the general complexity of the numbers involved. Should districts be contributing more locally? Some already do, if they can afford it; the generosity of districts' benefits varies tremendously across the state. Should more money be appropriated by the state? That certainly needs to happen in the short term, but it doesn't solve the systemic problem; rates have been prohibitively high for some time, which is why this new 50% increase is so painful. Should the plans themselves be reconfigured by EBD? Yes, probably. Is the ACA to blame? That's been implied a couple of times, but nobody can say how. The fundamental problem is that not enough teachers are enrolled in the system — only about 65% of school employees are opting to receive insurance through work, because rates are so high. If the rate hike does happen, that percentage will plummit further, with more and more employees (the healthy ones) leaving...and that would drive rates even higher. This isn't unique to Arkansas or to teachers. It's the same cost "death spiral" that's happened to varying degrees in the health care system nationwide and that the ACA is meant to fix.

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