Tuesday, July 29, 2014

EBD: some teacher insurance rates will rise by 7 percent, others by 30 percent

Posted By on Tue, Jul 29, 2014 at 6:22 PM

click to enlarge ANOTHER INCREASE: The Employee Benefits Division board
  • ANOTHER INCREASE: The Employee Benefits Division board

Public school employee (PSE) insurance
rates for 2015 were announced today by the state board that manages the health plans for both PSEs and state workers (rates for Arkansas state employees were announced at a prior meeting). The legislature established a variety of changes to the floundering PSE plan earlier this summer in a special session, but it is the board of the Employee Benefits Division (EBD) that is responsible for doing the technician's work of implementing the policy set by lawmakers.

EBD's mandate is narrow: keep the two insurance pools solvent. Given the money the legislature has allotted — or lack thereof — that means raising rates yet again on long-suffering teachers and other public school workers. However, the size of the increase that employees will face in 2015 varies widely depending on which type of insurance they choose. The devil is definitely in the details on these numbers, and school employees will want to look very closely at their options for the coming year. 

Here's what's changing, in a nutshell:

  • the cost of a Silver plan will rise by 7 percent for all active public school employees and will be renamed "Premium." It will also become slightly richer in actuarial value; it's essentially replacing the old Gold plan.
  • the Gold plan is going away. Its participants will be rolled into Silver unless they elect to make a change.
  • the cost of a high-deductible Bronze plan will rise by 30 percent for active public school employees who have spousal, child, or family coverage and will be renamed "Classic". However...
  • the cost of a Bronze plan for individuals will triple, from $11 per person to $45 per person
  • a new bare-bones, sub-Bronze plan will be made available at the same cost of the old Bronze and will be called "Basic." It will feature a deductible of $4,250 for an individual or $8,000 for a family, with even higher out-of-pocket maximums.

Here's what's not changing, by the way, and won't change until either the state or school districts, or both, add more money to this struggling fund:

For those wanting to see actual numbers released today, here's a helpful sheet assembled by the Arkansas Education Association (AEA) that includes both the premium costs for employees and the deductible and out-of-pocket maximum on each plan. Note that these costs will be less for those teachers who work in those few districts that kick in extra money for their employees' health insurance. (Note also that these rates require employees to get annual wellness visits; if employees don't get preventative care, their rates will rise sharply.)

The good news, at least, is that the overall plan is in better shape this year than it was last year. There's no immediate disaster looming. But, it's taken two special sessions and untold hours of work to get to that point.

It is also worth noting that rates on Classic insurance (formerly Bronze) for state employees will leap by over 200% in the coming year. However, this change won't actually affect many people, since very few state employees are enrolled in the Bronze plan. That's because state employees already get a good deal on their Silver/Gold/Premium insurance, thanks to the much higher contributions provided by their employer, the state. (Rates on state employees for the Premium plan will also rise somewhat, between 2% and 14%.) More public investment means the state employee plan is solvent, while the school employee plan is not. 

Will real systemic reform happen in the 2015 session? After the meeting, I spoke to Richard Abernathy, who heads the association representing Arkansas superintendents. I asked his thoughts on the proposal to do away with the PSE plan altogether and instead allow districts to purchase their own insurance independently. Abernathy said that every reform option should be on the table, but that simply requiring districts to buy health insurance on their own would be no panacea. He worries it would allow the state to wash its hands of the whole messy issue. 

"I think we're seeing a real effort to shift obligations onto districts," he said.

Support for education reporting provided by the Arkansas Public Policy Panel.

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