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Hearings to
be Held on Teacher Health Care Proposal
Gongwer News Service, July 14, 2005
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The state could
save as much as $281 million, as much as $165 a pupil, if it
were to adopt a centralized system for purchasing and providing
health insurance for teachers, a report prepared for the
Legislative Council concludes, but Senate Majority Leader Ken
Sikkema (R-Wyoming) said no legislative action will be taken on
the proposal until it has undergone a series of hearings.
But Mr. Sikkema and Senate Appropriations Committee Chair Sen.
Shirley Johnson (R-Troy) praised the findings of the report that
said a statewide pool of health insurance benefits for teachers
would save anywhere from $146 million to $281 million for the
state and local school districts, while potentially improving
benefits for as many as 90 percent of the state's public school
teachers.
And while some Democrats and officials of teacher organizations
worried that the report was an attempt to get at the Michigan
Education Special Services Administration, both Mr. Sikkema and
Ms. Johnson firmly asserted during a press conference that the
effort was not aimed at MESSA.
"MESSA is not the issue, it isn't for me," Mr. Sikkema said.
"The issue is how do you provide top quality benefits to school
employees." And how is that done when it cannot be denied that
the cost of health benefits is putting pressure on local school
budgets, Mr. Sikkema said.
Senate Minority Leader Bob Emerson (D-Flint) said if it can be
shown that a pooling process can be shown to save money without
harming benefits that had been negotiated then that should be
explored. But, he said, he doubted such a proposal could work
without cutting benefits, given the experience in some other
states.
Mr. Emerson also complained that members of his staff were kept
out of the press conference Mr. Sikkema and Ms. Johnson held on
the report. To find out what was said he had to call a reporter
who covered the function.
The first hearing is scheduled for 1 p.m. Wednesday, July 20, in
the Senate Hearing Room in the Boji Tower in downtown Lansing,
and at that session officials from Virginia-based Hay Group will
outline their findings.
Ms. Johnson said she wanted at least three hearings on the plan
before lawmakers begin to consider what action to take on the
proposal.
MESSA and anyone else is welcome to react to the proposal and
provide their own viewpoint, she and Mr. Sikkema said.
While critics have said the report was a smokescreen to move SB
55 and SB 56, which would create a statewide health insurance
pool, Ms. Johnson said those bills are now dead. If a proposal
does move forward, then new legislation would be created.
But Gary Fralick of MESSA questioned how lawmakers could say the
bills are dead since the report's conclusions effectively
support the premise of the two bills. "They could have saved the
taxpayers the $285,000" the report cost, he said.
Asked if any proposal would be tied to the 2005-06 school aid
budget, Mr. Sikkema said that would be difficult.
The study found that the average cost of health insurance for
teachers in the state was $11,362 a year. Some 48 percent of all
teachers have a fee for service insurance system - compared to 8
percent of all public employees - and for those workers the
average cost of insurance is $12,349 annually.
In comparison, Mr. Sikkema said the average cost for state
employees is $9,212 and for Senate members and employees,
$8,893.
The study said if no changes are made to the plans that exist
now, except that they are administered under one statewide
system, then savings could be $146 million a year.
If the state offered a preferred provider plan along with fee
for service plans and health maintenance organizations, then the
savings could total $155 million a year, the report said.
The group recommended, however, the state offer no fee for
service system, creating instead a PPO and several HMOs. The
total savings would be $281 million, and the study said 73
percent of the state's teachers would see an improvement in
benefits.
The report also recommended that the Michigan Public School
Employees Retirement System administer the system.
Mr. Sikkema said the state would see savings through pooling of
administrative functions, and teachers would see improvements
through lower co-pays.
But Mr. Fralick said insurance savings come through the free
market where different insurance plans can compete with each
other at the bargaining table. The proposal in the report calls
for a "big government" decision that takes power away from local
officials.
Mr. Fralick also said under the current system the only way to
save more money on health insurance is to cut benefits despite
what the report said.
Liz Boyd, Governor Jennifer Granholm's spokesperson, said the
administration had not yet had a chance to review the report and
wanted to give it a thorough and objective review.
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