AUGUSTA — Local school officials think new state legislation and a victory in court could help dramatically lower the cost of providing employee health insurance by allowing the school system to shop for other plans.

However, the leader of a teachers’ union trust that provides insurance to the vast majority of teachers in Maine warns that those potential savings would bring greater risks for school systems, inferior plans and higher costs for teachers.

The leader of the local teachers’ union, Jeff DeJongh, president of the Augusta Education Association, anticipates the Board of Education will likely propose a new insurance plan for union employees as part of just under way contract negotiations. He said a recent presentation to the Board of Education by an insurance consultant may have sounded good to some, but he invoked the adage, “Anything that sounds too good to be true probably is.”

Now, insurance is provided by Anthem Blue Cross through the Maine Education Association Benefits Trust.

Augusta Superintendent Cornelia Brown said there are two main goals to looking at competing plans: contain health insurance costs and give employees more flexibility.

“As we look at how to give people decent insurance and how to not tax a community beyond its means, if there is a way to creatively offer comparable health insurance, contain costs, and offer more flexibility, then I think it’s irresponsible not to do that,” Brown said. “It’s a reality that health care costs are going to go up and a reality school departments and other employees are going to have to make some hard choices about how they manage that increase.”

Brown said a proposal submitted by Aetna — in this case to provide health insurance for the school system’s 33 non-union-represented employees — could save about $90,000 a year, with costs decreasing from the $408,000 to $314,000, a 23 percent drop.

She said the plans would be cheaper for employees, too, and the coverage provided by the current and proposed new plans is comparable with coverage remaining basically the same.

Brown said if the number of employees were to include the 275 union workers insured through the MEA Benefits Trust Anthem plan, then the savings could multiply dramatically.

Augusta spent nearly $2.2 million for school employee health insurance this year, according to Business Manager Karla Miller.

Christine Burke, executive director of the MEA Benefits Trust, said no other insurer offers a plan like theirs, with low deductibles, low out-of-pocket-costs for employees, and rewards to serve as incentives for plan participants to live healthier.

“If the school district gets a better quote, it’s probably because they lowered the benefits,” said Burke, noting that teachers receive “healthy” benefits in part because they are paid so little.

Burke noted the trust’s insurance plan, with some 70,000 members, is the largest in the state and Anthem’s largest on the eastern seaboard. That gives the plan and the teachers and other educators it serves bulk buying power, she said.

She said individual school districts won’t be able to offer similar plans. And, she warned, they’ll also be taking on more risk.

She said a large group plan, where everyone in the state pays the same rate and shares risk, provide stability in rates, as school districts that have a bad loss year, with many employees getting hurt or sick, are balanced out by districts having a good year, with few injuries or illnesses.

If a plan has only 500 or so members and has a bad year, or even a single, costly claim, it could boost insurance rates significantly, Burke said.

Looking at change

The contracts of some union locals, including the Augusta Education Association, specifically state that health insurance will be provided through the MEA Benefits Trust. So a change in plans would have to be negotiated with the local union.

Brown suggested that a change in insurance plans, with multiple union contracts about to expire, could well be part of negotiations. Union leaders were invited to, and attended, a recent Board of Education presentation looking at other insurance plans.

DeJongh, the union president, also anticipates a change in insurance plans will be put on the negotiating table by the Board of Education.

DeJongh said the presentation by Joseph Russo, chief operating officer and senior vice president of employee benefits of HUB International LLC, an insurance services brokerage firm, was slick and sounded good on the surface, suggesting the Aetna plan could provide the same benefits and services provided now at lower costs.

But he said he left with a lot of questions about the plan.

Brown said Augusta can shop for different insurance providers because of state legislation passed last year that requires insurers to release loss data — the cost of providing health care to plan participants — to school districts.

The MEA Benefits Trust sued the state to block the release of that data, arguing that doing so would undermine the trust’s ability to charge one statewide rate for insurance coverage, but lost in federal district court in a case decided this year. Augusta was one of multiple school districts filing as intervenors in the court case.

Having their loss data to show potential competing insurers what’s at stake gives schools the ability to seek other insurance providers. Without that data, other companies would not bid to provide insurance, Brown said.

Burke said some southern Maine school systems may be able to get lower rates because health care costs are lower in that part of the state. But, she said if those school systems leave the trust it could result in rural northern Maine school systems having to pay more for health insurance to make up for the loss of the southern schools.

Brown said Augusta’s insurance plan year starts July 1, so if board members want to change the plan, they’ll need to take action in April.

Burke said she understands school officials are frustrated and angry about the rising costs of health care and insurance. But, she said, the best way to address those concerns would be to work together to reduce costs.

Keith Edwards — 621-5647

[email protected]

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