Study: Wisconsin schools’ insurance costs fall [Telegraph-Herald (Dubuque, IA)]

about the organization According to its website, "EAGnews.org is the flagship website of Education Action Group Foundation, Inc., a national organization headquartered in Michigan. EAG is a nonpartisan, nonprofit organization with the goal of promoting sensible education reform and exposing those with a vested interest in maintaining the status quo."

MADISON, Wis. - Health insurance costs have declined in Wisconsin's public school districts thanks to Act 10, according to a new study by EAGnews.

Act 10 is Gov. Scott Walker's law that effectively ended collective bargaining for most public

workers.

In a survey of 312 of Wisconsin's 426 public school districts, EAG found the average cost of single monthly insurance premiums fell from $754 in the 2010-11 school year, or pre-Act 10, to $693 per month in 2011-12, the first year Act 10 was in effect.

The savings have continued in the current school year, with average monthly rates down to $665, according to a survey of 268 school districts.

For family coverage, average rates have declined from $1,752 per month to $1,551 over that period, according to the study.

"It's been two years since Act 10 brought a lot of competition into the Wisconsin school insurance market and eliminated WEA Trust's collective-bargaining advantage," the study asserts. "It's clear that public school districts are saving a great deal of money as a result."

EAG's findings are supported in part by research from the nonprofit Wisconsin Taxpayers Alliance, which found the overall cost for K-12 employee health insurance in Wisconsin decreased by about $91 million, or 24 percent, in 2011-12.

Total accumulated savings for all districts were higher, but the $91 million figure includes those districts that had higher insurance prices because they could not, or chose not to, take advantage of the new law, WTA's Dale Knapp said.

While many districts have implemented the changes, others extended full collective-bargaining contracts prior to the enactment of Act 10.

The law is in a kind of legal limbo.

While a Dane County judge struck down many of Act 10's

provisions related to local public employees, a federal appeals court upheld the law in its entirety.

Some contend the financial results have been mixed. The administrator of one school district noted in EAG's report contends that while his public school system saw significant savings in health insurance costs, the savings haven't made up for the cuts in state aid sustained under Walker's austerity measures in the past two-year budget.

As the EAG report points out, Act 10 took health insurance off the collective-bargaining table, allowing school boards to unilaterally select insurance providers.

It also opened the door for increased competition from insurance companies that had stayed out of the public school market in large part because the market was dominated by WEA Trust, the not-for- profit insurance company founded by the Wisconsin Education Association Council and closely tied to the state's largest teachers'labor union.

In many cases before the collective bargaining changes, teachers'unions would demand WEA Trust health insurance, tying negotiations to the choice health insurance provider.

"That allowed WEA Trust to establish rates in many instances without worrying about competition for clients," the EAGnews study states. "Many other insurance companies never bothered to bid for public school business because they knew WEA Trust had a distinct advantage."

The EAG study includes comments from several district administrators who recalled the insurance climate before the collective bargaining changes.

"I can't remember a time when premiums haven't gone up," said Bob Reynolds, administrator of the Slinger School District, speaking of the

pre-Act 10 era.

A representative from WEA Trust did not return a call Thursday from comment on this story. The trust's website notes the not-for- profit is "dedicated to putting member needs first. For every dollar we collect in health premiums, we pay back, on average, 93 cents in the form of benefits."

But a lot of districts left WEA Trust in the days following implementation of Act 10, including Muskego-Norway, which saved $2.4 million in the first year with a new insurer; Menomonee Falls, which saved $920,000; and Hartford, which saved $500,000, according to the study.

Other public school systems, like the Appleton School District, stayed with WEA Trust, finding the trust much more amenable to lowering costs. According to the EAG study, Appleton taxpayers saved about $3.1 million thanks to better contract terms.

The Potosi School District, which opted to move from WEA Trust to Medical Associates of Dubuque, in 2011-12 saw the biggest percentage decline in family plan premium costs in the study. Premiums plummeted by nearly $1,000, from $1,970 per month to $994, a post- Act 10 savings of nearly 50 percent.

The school board adopted insurance plan changes and came out with first-year savings "a bit under $200,000," Potosi District Administrator Steven Lozeau told EAGnews. Lozeau said the successful bidding process was a first for the district because "before that it had to be agreed to by the union, which almost never happened."

In an interview with Wisconsin Reporter, however, Lozeau cautioned that it would be a stretch to say the school district is in any better financial shape nearly two years after the governor signed a budget with deep spending cuts, including to schools, designed to fill a

$3.6 billion state budget shortfall.

"I'd say that's a double-edged sword," the administrator said. "The changes we made allowed us for the most part to offset the decreases in revenues we got from the state. We were probably pretty close to a wash. So was Act 10 positive? Depends on who the eye of the beholder is."

The health-insurance savings helped, Lozeau said, but they came at the expense of public school teachers and other public employees.

"I would say that if more than 10 percent of any school district in the state can honestly with a straight face, when all is said and done, say they have saved some money, I would be surprised," he said of Act 10. "Mostly it was a wash, and for some, it was a reduction."

But the EAG study found much has changed in the public school insurance market during the past few years. In 2010-11, 51 of 316 surveyed school districts reported lower single coverage insurance rates than the previous year, while 46 had lower family rates.