Statewide coverage outlined

By Mark Guydish mguydish@timesleader.comEducation Reporter

HARRISBURG – Battle lines formed on the teacher health insurance front Monday, with representatives from school boards, unions and consultants weighing in on the proposed creation of a statewide system that would give the same coverage to all teachers.

The state House of Representatives Education Committee heard testimony on House Bill 1841, which got on the legislative fast track when Gov. Ed Rendell recently endorsed it.

State Department of Education Executive Deputy Secretary Tom Gluck told the committee that, once enacted, the bill includes an “intentionally ambitious” timeline that would put the new coverage system in place in as little as 18 months.

Gluck joined bill co-sponsors Dan Surra, D-Clearfield County, and Steve Nickol, R-York County, in touting the bill and answering questions from committee members, including Rep. John Yudichak, D-Nanticoke. The bill would create a 12-member Public School Employees’ Benefit Board, with four members from the state government, four representing teacher unions and four representing employers.

The board would collect data and determine if a statewide system is feasible. If so, districts would be required to join as current teacher contracts expire.

Goals of proposal

The goal is to take most health care benefits “off the table” during contract negotiations and to save money by “leveraging” the large group of those covered – about 250,000 statewide – into lower insurance costs, Gluck said. He noted that health care premiums increased by 24 percent between 2003 and 2005, and that districts spend $1 in every $6 of property tax on health insurance.

Committee Chairman James Roebuck, D-Philadelphia, asked about coverage for retirees.

Nickol said the new system would include one group of retirees – those with 30 years of service who retired under the age of 65 – because they are given the right to buy such insurance under current state law. Others who want to buy coverage would be allowed to.

Roebuck asked about another potentially thorny issue, the proposal that teachers could buy additional coverage beyond the basic universal coverage offered under the plan. Some wealthier school boards may offer to pay for that additional coverage, which would lead to other local unions pushing for the same benefit. That, Roebuck said, would defeat the purpose of the bill.

While the language of the bill may not eliminate that possibility, Nickol said the intent is to have the state insurance board offer the additional coverage but require teachers to pay for it, keeping it out of negotiations.

Supporter’s concerns

Rep. Karen Beyer, R-Northampton County, a former school board president and staunch co-sponsor of the bill, asked if charter school teachers would be covered, and Nickol said he assumed they would have the option to buy coverage, since charters are public schools. Beyer also lamented the lack of state legislators on the insurance committee, but Nickol said his experience is that legislators are often too busy to attend such board meetings.

Saying he was proud to be a co-sponsor of the bill, Yudichak cited the bitter battle over health insurance premium co-pays that led to strikes at Crestwood School District, as well as the current strike at Lake-Lehman and the potential for a strike in Greater Nanticoke Area. He worried that the 12-member insurance board, with representatives from three sides of the issue, could gridlock over critical decisions.

Surra said the bill tries to avoid that by having equal representation on each side, and by mandating that any important decisions would require approval by a “qualified majority,” meaning at least two members from each group would have to approve.

“It forces you to do what’s fair,” Surra said.

Rep. Duane Milne, R-Chester County, asked about the role of existing consortia, groups of districts that banded together to lower insurance costs. Eight Luzerne County districts, as well as two vocational-technical schools and the Luzerne Intermediate Unit, belong to a local consortium, where leaders have criticized the new plan as unable to generate the savings promised – up to $550 million a year, according to one study some have called seriously flawed.

Nickol stressed that the bill creates a board that decides what will work best, and that board could decide working with existing consortia would be the way to go.

Pointed questions asked

Those raising the most pointed questions were Pennsylvania School Boards Association Assistant Executive Director Timothy Allwein, Pennsylvania Association of School Business Officials Executive Director Jay Himes, and Pennsylvania Association of Rural and Small Schools Executive Director Joseph Bard.

All three praised the legislators for attempting to tackle the complex issue but expressed doubts. Allwein said the proposal takes too much control out of the hands of local school boards but leaves them most vulnerable to cost increases, due to a provision that caps how much the state will pay toward health insurance premiums at 50 percent. Such a cap means districts would have to cover the rest when they had no control over the insurance policy.

The new plan could force districts to give up hard-won union concessions that make teachers pay part of their health insurance premiums, Allwein said. And it could force districts to provide insurance to employees currently not covered, further driving up costs.

Himes said he did not believe the projected savings could come without cutting benefits, that the transition to the new system could lead to a disruption of existing coverage, and that the way the state plans to determine how much assistance each district gets in covering premiums could backfire.

While the plan is designed to give more money to poorer districts, it doesn’t consider that some districts may be in regions with higher premiums, regardless of their tax base.

And Bard worried that the bill would penalize small, often poor, rural districts by forcing them to increase insurance coverage to match that already offered by wealthier districts.

Beyer sharply rebuked all three. “The (insurance) board is not even formed and already the fighting has begun” she said. “The status quo is not acceptable.”

Two men representing private insurance consultants and underwriters used by districts and consortia raised more questions about the bill, primarily echoing concerns about the elimination of existing consortia.

Unions differ

But representatives from the two largest teacher unions – The American Federation of Teachers and the Pennsylvania State Education Association -- split on their support.

Pat Halpin Murphy, AFT government relations director, said her union hadn’t taken a stance on the proposal but found two key concerns: The insurance board seemed to have more “employers” than “employees” (she considered the four state officials part of the former group), and the bill seems to favor only one union rather than guaranteeing representatives from all unions affected.

PSEA President James Testerman supported the bill, stressing that it doesn’t set up coverage; it just creates a board that would look into and possibly design a coverage system. As long as the new system provided “quality health care benefits” while reducing costs for districts, he said, it made sense to explore the idea.

“The weight and urgency of this issue dictates that it be addressed,” Testerman said. “Whether that occurs now, or in a short num

Mark Guydish, a Times Leader staff writer, can be reached at 829-7161.