Bad news about teacher insurance 'fix'; employees fleeing plan | Arkansas Blog

Tuesday, December 17, 2013

Bad news about teacher insurance 'fix'; employees fleeing plan

Posted By on Tue, Dec 17, 2013 at 4:50 PM

Benji Hardy reports on his blog at the Legislative Digest today on progress with the short-term fix of the crippled state insurance plan for public school employees. It's not a happy report.

A deficit in the program continues, to be covered by reserves. That was not unexpected. But employees are fleeing the plan and that's the really bad news from Bob Alexander, director of the state employee benefits division.

But Alexander also said that the PSE plan will have 1,446 fewer members in 2014 than in 2013, a decline of about 3% and a surprise to EBD. Alexander and Deputy Director Doug Shackelford said they had actually expected membership to rise slightly for 2014, hoping that the mandate to buy insurance contained in the federal Affordable Care Act would drive greater participation in the system by school employees.

“We didn’t anticipate we’d lose 1400 people out of the system,” said Alexander. Hendren asked him what effect that had had on the overall percentage of school employees now buying into the insurance system. “Participation is just shy of 60%,” he replied.

That is ominous. Steadily declining employee participation is what has fueled rising premiums for teacher insurance for years — which in turn causes more people to leave the system, and so on, and so on.

As Hardy notes, it was probably a tad optimistic to think a plan that was already losing members because of its high cost would grow in participation simply because the legislature provided enough extra money to limit this year's premium increase to 10 percent.

These are still more ingredients to add to a coming fiscal session of the legislature where lawmakers will confront the need to provide additional money for several programs or cut them, not to mention potentially face a gigantic need for cutting if votes can't be mustered to keep a tide of Obamacare Medicaid expansion dollars flowing. And, don't forget:  Republicans insist improvident tax cuts of the 2013 session are not negotiable. They stay. No matter who suffers. 





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