PrintApril 29, 2011
Public schools, health insurance costs and OPM
The lavish health insurance plans provided for public school district employees and their miniscule 5% (on average) contributions have been a major point of contention in the battle between Governor Scott Walker and the Wisconsin Education Association (WEA). When Governor Walker's budget repair bill finally goes into effect, Wisconsin's public school teachers (along with other public sector union employees) will be required to pay at least 12% of their insurance premiums or less than half of what most of their private sector neighbors pay.
It comes as no surprise that the hard-pressed taxpayers of Wisconsin are not particularly sympathetic to those public sector employees who are screaming and protesting the extreme injustice that fiscal responsibility is bringing upon their privileged status at the public trough. What may come as a surprise to the hard-working taxpayers of the Dairy State are the suspiciously high insurance premiums that they have been saddled with. The Milwaukee Journal Sentinel reports that school districts in southeastern Wisconsin pay as much as 76% more for health insurance than their private sector counterparts.
An insurance analysis produced by HCTrends revealed that school districts in southeastern Wisconsin could save roughly $221 million per year if their health insurance plans were in line with those offered in the private sector.
The latest HCTrends report summarizes data reported to the state school boards association by 89 school districts in Milwaukee, Waukesha, Washington, Ozaukee, Racine, Kenosha and Walworth counties.The figures are for 2009-10. The association has some health insurance data for 2010-11, but it isn't as comprehensive.[...]On average, the school districts paid $9,024 for a single coverage plan, and $20,628 for a family plan, according to the report.The private employers surveyed paid an average of $5,125 for single coverage and $15,500 for a family plan. Private companies with unions paid more-$5,625 for single coverage, $16,000 for family-but still significantly less than the school districts.
According to benefits consultant Andy Serio, most of the plans offered to the school district employees cost more because of lower deductibles, co-pays and out of pocket expenses, combined with provider networks which often include every health care provider available.
Also at issue, he said, is the role of the WEA Trust, a WEAC-affiliated nonprofit that insures employees in about two-thirds of the state's school districts.
In some districts, WEA Trust has no competition for the health-insurance business, Serio said.
It would appear that the public school districts and the Wisconsin Education Association Trust have not been spending much time and effort shopping around for competitive insurance plans. It's easy to spend other people's money, until they go broke.
