Pooling state's school employees for health care savings makes sense
It won't come in time to help the standoff at the Seneca Valley School District, but Gov. Ed Rendell is promoting an idea to save taxpayer dollars and remove a sometimes contentious issue from school districts bargaining sessions.
Rendell is proposing to pool together the 230,000 public school employees into a large health insurance program that should produce significant bargaining power to help control escalating health care costs.
On their own, the state's 501 school districts do not have the sort of buying power that can restrain costs. But with 230,000 plan participants, a pool of public school employees would have significant leverage in terms of cost and coverage.
And in today's health care environment, that is important. A recent national report found that companies and their employees saw health care costs increase 6.1 percent this year. That increase was reported as a positive trend, given that health care costs had increased by 13.9 percent in 2003.
Since 2001, premiums, which are generally split between employers and their workers, have shot up 78 precent, which is about four times faster than average wages and inflation. That represents a burden on both employers and employees.
The Kaiser Foundation study found that typical coverage for a family of four costs $12,100, with companies paying an average of 72 percent of premiums. That leaves workers to contribute an average of $3,281 for family coverage, plus higher deductibles and higher co-pays for visits to the doctor office or hospital.
Employers of all sizes and in all parts of the country are being squeezed, along with their workers who are picking up a share of the rising costs for their health care.
Because school districts and their taxpayers appear to be at the breaking point in terms of property taxes, Rendell's proposal deserves serious consideration. A bill in the state House of Representatives would create a 12-member board to study the options and implement the program. That board would have representation from school boards, school employees and the state.
The dominant state teachers union, the Pennsylvania State Education Association, said it supports the idea of a large pool for health insurance, but wants to learn more details. Likewise, the school board association also said it is interested, but it didn't want to see costly expansions in coverage, such as an extension to cover part-time workers not already covered.
In addition to providing cost savings by pooling so many people together, Rendell's proposal would also remove an often contentious issue from the bargaining table on teacher contracts. This would not eliminate contract stalemates, like the one at Seneca Valley, but it would narrow the scope of disagreement.
Agreeing to a uniform, statewide health care program for school employees would shift issues of coverage, employee contributions, co-pays and deductibles to a centralized state board and away from 501 separate school boards. In addition to the pool's leverage, the state board would have a higher level of expertise in terms of comparing, pricing and designing health insurance programs than most local school boards can muster.
A statewide program also would present an opportunity for school employee contracts to look more like those in private industry, which generally require realistic contributions from employees for their own health care.
While some school districts might object to losing local control on this issue, a look at the state's management of pension funds for school employees supports the notion that local control is not always necessary — or optimal.
If cost savings result from the large pool of employees and centralized contract, those savings might well offset any addition contributions school employees might have to make.
The Rendell administration plan for establishing a statewide pool for school employees is the product of several years of work on the issue and presents multiple benefits, the greatest being cost savings.
Maybe the next time the teachers at Seneca Valley, or any other district, sit down at the bargaining table with district officials there will be one less issue to disagree about.
