No solution in sight for public school employee insurance crisis | Arkansas Blog

Tuesday, June 10, 2014

No solution in sight for public school employee insurance crisis

Posted By on Tue, Jun 10, 2014 at 9:58 PM

Sen. Jim Hendren
  • Sen. Jim Hendren
Yesterday, the Education committee yet again rehashed the broadband-in-schools stalemate; at the Capitol today, there was more circular talk about another public school issue that seems like it’ll never be resolved — the endless, slow-motion crisis in the teachers’ insurance system.

To avoid a calamitous rise in insurance rates for public school employees (PSEs) at the end of 2014, the legislature will need to convene in special session this summer. Gov. Beebe won’t call a session until legislative leaders are confident that the votes are present to pass whatever fix is proposed. Today, the task force created to study the PSE insurance problem met jointly with the full Ed committee to review draft legislation proposed by Sen. Jim Hendren (R), the task force chair.

The main takeaway is that lawmakers – at least in their public comments – seem to be far from the consensus needed before Beebe will call a session. That caveat is required in part because a contingent of teachers and other school employees were present at the meeting, two of whom testified to emotional effect.

Much of members’ criticism was directed towards Hendren’s proposal to remove part-time school employees from eligibility and instead allow them to seek subsidized coverage under the private option or via ACA subsidies. That’s problematic for two reasons. The first is that Hendren fiercely opposes the private option and the ACA, and would like to see both defunded.

Sen. Jason Rapert (R), who has voted for the private option, spoke against moving part-time school employees off the PSE plan. “There’s no doubt in my mind that there are some in this room who have every intent of getting rid of the private option,” he said. “There’s a problem in offering that as a solution.”

The second problem is that some part time school staff actually might not be eligible for ACA subsidies if they’re removed from the school employee plan, as pointed out to lawmakers recently by Arkansas Advocates for Children and Families. Because of a flaw in the health law called the “family glitch”, ACA subsidies are available only to those individuals who can’t get affordable insurance from their employer or their spouse’s employer. If a school employee has a spouse with a job that offers spousal benefits, it might render the employee ineligible for ACA subsidies. That’s a problem because many employer-offered family plans actually aren’t affordable at all; the “glitch” part refers to an issue in how affordability is calculated, which leaves many families paying huge percentages of their income for insurance. Advocates describes the issue in more detail on their blog.

The Arkansas School Board Association announced that it would withdraw its support for excluding part-time employees based on concern over the family glitch, and Republican Reps. Bruce Cozart and Sue Scott both delivered passionate defenses of keeping school employees covered. Democratic Sens. Linda Chesterfield and Joyce Elliott also indicated they objected to the change.

Perhaps the part-time employee exclusion will fall by the wayside as part of the proposed legislative package. That still leaves a variety of other proposals to nibble at the looming shortfall. Hendren proposes to raise premiums on employees who are buying the Bronze plan, which is still priced relatively low. He also wants to add a deductible to the Gold plan, which has indeed been an extraordinarily generous (and also extraordinarily pricey) benefit.

No proposal that has been discussed thus far, however, actually injects a significant amount of new, dedicated revenue into the insurance fund. The task force’s outline of legislative action only calls for a $20 increase in the state’s contribution per employee, with no indication of where the money would come from.

And, none significantly restructures the PSE plan. In his comments today, Rapert also said that he believes the public school employee plan should be merged with the state employees’ insurance plan, which would be a major overhaul. During last fall’s special session, Rep. Jim Nickels (D) proposed legislation that would have combined all state employees and public school employees into the same pool; it wasn’t seriously considered then.

That might help somewhat – but it could also sink the state employee plan without stabilizing the PSE plan. What’s really needed is more money, and a lot of it. But where that comes from, nobody knows.

One final thing about the issue of placing part-time employees on the ACA or the private option. A teacher I spoke to from a rural district privately told me that she’s convinced that many part time employees at her school wouldn’t sign up for subsidized coverage even if they were kicked off the PSE plan. She doesn’t feel that way herself, she clarified, but she knows plenty of others who do. That’s how strong ideological opposition to Obamacare runs at the moment.

“They perceive it as welfare,” she said. “It’s about dignity.” Of course, since public schools are wholly paid for by taxpayers, every ounce of insurance and salary and other benefits received by any school employee is also paid for by government – but this is about perception.

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