Jury still out on new insurance plan for Idaho schools

Jun. 30—When Idaho lawmakers approved a $105 million increase in school health insurance funding earlier this year, they hoped it would boost take-home pay for thousands of teachers across the state.

The move provided a nearly 50% increase in state support for school health insurance costs. It averaged about $4,100 per teacher and classified staff member.

At the same time, the Legislature approved a separate, $75.5 million pool of money to cover the one-time buy-in costs for districts that wanted to shift from private insurers to the state's self-funded insurance plan.

The idea behind it all was to help districts secure health plans that had better benefits, lower premiums and lower out-of-pockets costs.

"Most teachers right now have $1,000 to $3,000 deductibles, and pay $600 to $1,500 per month in premiums (for family plans)," said Rep. Rod Furniss, R-Rigby, during a Jan. 24 floor debate on the proposal. "Some teachers and staff write a check at the end of the month back to their school, to pay for health insurance. I think we can do better than that."

Six months later, the jury is still out on whether lawmakers accomplished that goal.

In north central Idaho, for example, some school employees will see substantial decreases in their health care costs. Others may see incremental improvements, but not the "game-changer" results that were anticipated.

The Cottonwood School District could be the poster child for what the Legislature hoped to accomplish.

Superintendent Jon Rehder said the district will shift from its private insurer to the state health plan in September.

"It was a no-brainer for us," he said. "The premiums on a family plan are currently $634 per month. The new premiums are $327 per month, so they're cut in half. And the deductible is way better; it's $350, versus $750 under our current plan."

Rehder and the district's business manager spent weeks checking the numbers, making sure they would hold up.

"Once you jump to the state plan, you're stuck there for five years, so we wanted to make sure the move was financially sustainable for the district and beneficial for our staff," he said. "We spent six or seven weeks making calls, sending emails, asking 'what if.' I'd go to bed thinking about numbers."

Cottonwood was one of the first districts in the state to switch to the state plan.

Every district, though, has to make its own unique analysis — and for some, the numbers just don't work out.

"Moving to the state plan was cost-prohibitive for us, even with the added funding," said Lewiston School District Superintendent Lance Hansen. "We had an increase of about $1.5 million, and we were still $1.8 million shy of what the state plan cost."

The Moscow School District won't make a final decision until August, but Superintendent Greg Bailey said it will probably wait to see if the Legislature makes any more changes this coming year.

"We have a good insurance program right now," he said. "It would be very expensive to move over to the state plan. My guess is we may not move this year. We have two years to decide."

One issue that's keeping many districts from making the switch is that the $105 million was distributed based on support units, which are a standard proxy for the number of classrooms in a school.

Each support unit provides funding for a teacher and set number of classified staff. Many districts, though, hire more people than they're compensated for under the state funding formula.

Hansen said when the formula was last modified in the 1990s, it didn't address things like IT staff or other critical positions.

"When you look at what's required to deliver education services today, the formula doesn't even come close," he said.

Consequently, districts that have actual staff headcounts in excess of what's provided for by the support unit formula have to come up with local funds to pay for those positions.

The same is true for health insurance costs. Moscow, for example, anticipates getting about $2.1 million in state funding this coming year for employee health care coverage. However, that's about $1.1 million short of the expected cost. And shifting to the state plan would cost even more.

Business Manager Jennifer Johnson said the extra state money is helpful, but it only goes so far.

"We have about 330 members who are benefits eligible, and we're only funded for 108.58," she said.

Districts have to decide by Friday if they want to switch to the state health plan this year. As of Wednesday, 26 districts with about 5,300 employees had signed up to make the switch.

The added state funding should also lead to some level of improvement, even in districts that don't join the state plan.

"The districts I've heard from are getting better policies, lower co-pays or they're covering more of the premium," said Quinn Perry, policy and government affairs director for the Idaho School Boards Association. "I know the money has been well-received. Districts feel like this is an investment that will translate down to the local level."

Rep. Wendy Horman, R-Idaho Falls, who co-sponsored the legislation allowing districts to buy in to the state plan, said that was always her primary goal.

"For those (legislators) who expected to see all school districts go onto the state plan, it hasn't worked out," she said. "But for those of us who were committed to this investment because we felt it would improve the quality, cost and benefits of school health insurance, I think it's working out just fine."

Spence may be contacted at [email protected] or (208) 791-9168.

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