News

June 26, 2008

Overall costs fall for school health trust

But cost per person rises because of two districts pulling out of group.

By Mark Guydish mguydish@timesleader.com
Education Reporter
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PLAINS TWP. – Overall costs for the Northeast Pennsylvania School District Health Trust continue to shrink, dropping 4 percent in the past year, the Trust board learned Wednesday. But thanks to the decision by two districts to leave the Trust, the cost per person has shot up by $26 per month.

That’s because the withdrawal of Dallas and Pittston Area school districts from the Trust meant a 14 percent drop in the total number of people insured, Dr. Stephen Rothstein of Blue Cross said. Blue Cross administers major medical and hospitalization coverage for the Trust, a consortium formed in 1999 to lower health insurance costs for area districts. The fewer people covered, the more it costs per person.

That hasn’t translated into an increase in costs to member districts, though. The Trust has already set premiums for the fiscal year beginning July 1, and most remaining districts saw rates drop by about 4 percent. Three districts saw steeper decreases thanks to new contracts that have teachers paying higher deductibles and co-payments for services. Greater Nanticoke Area and Wyoming Valley West saw drops of about 17 percent, while Tunkhannock Area had rates decline by about 7 percent.

The Trust, which ran in the red during its early years, has been building a surplus and lowering rates consistently in more recent times, and at each board meeting the officers and Executive Director Andrew Marko usually tout some new deal that will help keep costs down. Wednesday’s meeting was no exception.

Trust Board Co-Chairman Phil Russo announced that, after extensive negotiations, the Trust had landed a new deal on “stop-loss coverage” – insurance that kicks in once a single person’s claims exceed $300,000. The coverage had been provided by Swiss Re at a cost of $14.45 per member per month, but will now be provided by Avalon for $8.78 per member per month.

The local trust negotiates the stop-loss coverage jointly with 12 other similar regional education consortiums that form the larger Pennsylvania Health Trust. Russo was recently elected secretary to the state trust.

While the stop-loss insurance change means a premium savings of more than $17,000 annually, Marko noted that the net savings could be smaller. That’s because the local trust gets most of the stop-loss premiums back each year – close to $600,000 – if no claims are filed against it. Avalon, the new provider, has promised to continue that policy, Marko said.

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