Cuts in aid to education are impacting every community in the state. Teachers are facing layoffs and programs are being cut. School districts are discussing both spending reductions as well as increases in the already overburdened property tax.
In the search for savings, one road that leads to millions of dollars has been barricaded by a clever quirk in the law. Here’s the story.
Your tax dollars fund the most expensive public employee benefit: health insurance. In Maine’s school districts, that important employee benefit is most often a negotiation between the local school board and the Maine Education Association (MEA), better known as the state teachers’ union. On the MEA Web site, the union states its objective with clarity and transparency:
“The MEA acts as an agent for its members in meeting their health insurance and dental insurance needs. The association works to keep the MEA health and dental insurance programs used in most Maine schools at the highest coverage levels possible at the lowest cost available.”
Finding the “lowest cost available,” however, is not so clear or transparent for at least two reasons:
First, the Legislature has consistently discouraged competition for health insurance, which has left Anthem as the dominant health insurance company in the state. And second, a legal flaw, intended or not, precludes group self-insurance for school districts when providing our valued teachers and their families with this important benefit.
Tucked away in Maine law (MRSA Title 20-A, Chapter 1001, Section 5A), the option to self-insure teachers for their health-care coverage has been omitted from the statute. The law is silent, which means the option is not permitted. Did the Legislature make a mistake and forget that self-insurance may actually provide big savings?
The omission of a group self-insured health-insurance option appears to be reinforced further in a different section of the statute that governs publicly funded insurance pools (MRSA Title 30-A Chapter 117, Section 2251). The intent of this section boldly acknowledges that “the resources of political subdivisions are burdened by the securing of (insurance) protection through standard carriers,” suggesting that other options should be available to control costs and provide benefits.
But the law then goes on to list the specific types of self-insurance allowed by law. Again, the law omits health insurance as an allowed coverage. Another silly mistake? Probably not. A former state legislator once attempted to correct the omission, but saw her bill killed before it could draw a breath. The problem is well known and understood in the halls of the capitol, but powerful centers of influence stand firmly in the way.
In an effort to offset a million-dollar cut in state aid to education, one local school board recently compared their teachers’ Anthem plan to an existing self-insurance plan that covers their town’s municipal employees. The town currently spends about $2 million in annual health-insurance premiums to cover their teachers.
They found the benefits of the two plans to be comparable but, had their roughly 200 teachers been covered in the competitive group self-insurance plan, the savings for the town would have been $300,000 – per year. For every town and school district pinching pennies, this enormous savings could help minimize cutting programs, benefits and teaching positions.
Let’s do the math. Two-hundred teachers represents less than 1 percent of the union’s 25,000 members in Maine. So, if $300,000 can be saved for just 1 percent of the teachers through self-insurance, then statewide savings could easily exceed $30 million in just one year.
If the governor and the Appropriations Committee are looking for a quick, $30 million savings to close their budget gap in the next two months, they need to look no further than a simple amendment to the statute to at least allow group self-insurance as an option for teachers. Given the history of previous attempts, however, that may be easier said than done.
As the old saying goes, “I wouldn’t be paranoid if they weren’t out to get me.” It’s understandable why some folks are cynical about the special interests that oppose such an amendment. If a remedy is blocked, then expect to see job losses among teachers and/or higher property taxes coming your way.
On the other hand, if such cynicism is completely wrong and the omission has been just a big multi-million dollar mistake, then maybe it will be fixed quickly and easily with an emergency bill submitted by the governor.
What do you think?