4/7/2008 3:21:00 PM

Health insurance pool bill for teachers should sink

By Robert Mattieson

In what has become an annual ritual, the Minnesota Legislature is poised to pass a bill mandating that school districts participate in a statewide employee health insurance pool.

This fundamentally flawed proposal also passed in 2007, but fortunately was vetoed by Gov. Pawlenty.

Hopkins Public Schools' Legislative Action Coalition (LAC), with the support of the school board, administration and Hopkins Education Association (the teachers' union for Hopkins Public Schools) opposes this legislation, and we urge Governor Pawlenty to veto it again should it reach his desk.

There are several reasons why a mandatory health insurance pool for Minnesota school districts is a bad idea.

First, it does nothing to address the fundamental problem - the rising costs of healthcare for everyone.

On the contrary, it would increase costs, adding to the burden on taxpayers, or more likely, the 200,000 plus participants the plan purports to benefit.

The Minnesota Department of Commerce has noted that a pool of this size (about $1 billion in claims per year) would require a reserve of at least $150 million.

This would mean that each participant would have to contribute an additional $30-$50 per month for a minimum of two years, just to build up an adequate reserve.

The pool would also add another layer of administrative bureaucracy and red tape to the system, adding more costs. In fact, the bill provides a $4 million appropriation just for start-up costs.

These additional costs would probably not be completely borne by the participants (who should not be so burdened), but by their employers, the school districts.

While the exact cost to Hopkins and other districts is not known, it would be considerable, requiring budget cuts in other areas. So anyone who is concerned about increasing class size and reduced course and other offerings should be concerned about this bill.

This proposal has another fatal flaw. This huge pool would not be guaranteed by the state or any other entity. If it failed, it is not clear who would be liable, which means that the districts or (worse) the teachers would be left out in the cold.

The bill provides that the pool would be run by a board appointed half by Education Minnesota and half by the school districts, with no requirement that they have either the needed insurance or financial expertise. It would be a very risky proposition.

Hopkins and many other school districts have worked hard with their employees to devise healthcare plans that meet the employees' needs and address rising costs in a reasonable way. Different school districts, like other employers, have different needs, and each should be free to craft its own solutions. The statewide mandatory pool proposal would make this impossible, and punish districts and teachers' organizations that have come up with good solutions, while offering precious little help to those that need it. It is another example of the state taking control away from local communities, which rarely works well.

Health care costs are a tremendous burden on all employers, including school districts, and some districts do need help.

School districts now have the option to participate in a state public employee health insurance pool managed by the Minnesota Department of Employee Relations.

A statewide pool just for school districts may also make sense, but it should not be mandatory.

Hopkins' LAC would not be opposed to a voluntary statewide education health insurance pool.

Finally, this proposal is another patchwork approach to the big problem. Overall, a much better approach is for the state to adequately and fairly fund our schools, so they have the resources necessary to provide the world-class education our children need and deserve, through educational professionals who are compensated fairly for the extraordinary work they do. This is why the Hopkins LAC is strongly urging the Legislature to restructure the funding formula for public schools.

Robert M. Mattison is chairperson of the the Hopkins LAC Business Task Force and is on the steering committee.