Legislators draft possible solutions to school health insurance rate increase | Arkansas Blog

Legislators draft possible solutions to school health insurance rate increase


Legislative committees have produced possible options to address a huge rate increase otherwise coming next year for participants in the public school employees health insurance plan.

Roby Brock at Talk Business has the outline. Tapping state surplus in the short run is the first step, and probably easier as monthly revenue reports continue to improve. (Unless the Republican federal government shutdown and debt ceiling threat to defeat Obamacare ruins the national economy.) Depending on the amount of surplus used, the premium increases could be reduced from 50 percent to 10 to 16 percent.

Providing additional support on a continuing basis is a little more complicated. Gov. Mike Beebe would divide the burden equally — a third, or $18 million, each to the state, school districts and school employees.

The state's contribution would be $10 million from the governor in some unspecified way; $5 million by reducing state contributions to other public employees' insurance from money for each state budgeted position to money only for filled positions (over time, this could raise costs for public employees.); and $3 million from general revenue. School Districts would come up with their money by a reduction in money for staff professional development and facilities. Employees would come up with $18 million in premium increases.

The plan would have to change structurally, too. Talk Business lists the possibilities:

• Restructure Insurance Board
• Increase PSE representation on Board
• Appointments split between Speaker, Pro Temp, Governor
• Require Board to provide more education of participants on plan options
• Require preferred rate premiums for non-tobacco users; participation in wellness plan
• Require districts to send foundation funds from matrix to EBD, regardless of PSE participation rate
• Require deductible for all plans (changes current no-deductible Gold Plan)
• Incentivize Bronze Plans by allowing districts and state to contribute to PSE Health Savings Accounts
• Require reinsurance Task Force on State and Public School Employee Insurance Reform
• Establish a task force to do a comprehensive review of the entire ASE and PSE insurance system.
• Include experts from medical, insurance, human resources, others to be identified
• Determine affects on ASE and PSE insurance system by changing market and regulatory conditions.
• Require an interim report and recommendations to Insurance and Commerce and Education Committees by 9/30/2014.
• Continue working with final report and recommendations due 6/30/15. General Assembly can choose to extend the Task Force if needed.

Talking with Benji Hardy at Legislative Digest. He brings up some obvious questions.

* If the problem with school insurance is, in part, already low participation, why is a rate increase of only 10 to 16 percent going to cure that? (This is why you need mandates.)

* The requirement to use foundation money designated for insurance strictly for insurance — and not salaries, as you some districts have done — won't be popular with districts. And it will be a burden on many employees in districts with low participation rates. Or so it would seem.

UPDATE: Gov. Mike Beebe says he sees progress, but not yet the consensus necessary before he'd call a special session to address the issue.

Comments (7)

Showing 1-7 of 7

Add a comment

Add a comment