Lawmaker sees health care saving

Educator plan: Teachers union points to high costs in short term

BRAD SHANNON AND JORDAN SCHRADER; Staff writersMarch 28, 2012 

The state teachers’ union is mounting a fierce campaign at the Legislature this year to defeat a proposed consolidation of school health insurance.

The Washington Education Association reported spending more than $176,000 on advocacy efforts related to health care in January and February alone, not counting pay for its lobbyists. It stepped up efforts this month by staging 10 rallies that it says drew nearly 4,000 school employees.

The union has aired radio ads around most of the state and on Sunday ran full-page newspaper ads attacking the author of the legislation, Democratic Sen. Steve Hobbs of Lake Stevens.

“We are opposed to any changes in K-12 health care at this point,” Rich Wood, spokesman for the WEA and its more than 80,000 members, said this week.

Hobbs’ proposal to create a single state insurance pool to keep down premium costs over the long haul has bipartisan support and appears to be surviving the union’s attack, at least for now.

The plan could equalize coverage for K-12 employees and their families, according to the state Health Care Authority.

But it would cost the state some $12.4 million the first year alone, a point the WEA is driving home.


The debate makes for an unusual array of allies.

In support: the Public School Employees of Washington, the union that represents many of the classified or non-teaching employees and argues its members would see coverage improve under consolidation.

The PSE has spent about $50,000 to $75,000 on radio advertising, some cable TV ads and other expenses supporting the health care proposal, spokesman Rick Chisa said.

On the other side are the WEA and Premera Blue Cross, which together offer a set of plans that cover about three-fifths of school employees. Premera said 257 of the state’s 295 school districts choose its coverage, often as the sole option for employees.

Insurance brokers are also lobbying against a change. They sell the other plans that school districts can use, from such companies as Group Health, Regence Blue Shield and Kaiser Permanente.

There is support for the proposal in both political parties, but it sets up a tough choice for those Democrats who typically back the teacher’s union and those Republicans who often side with the insurance industry.

“We’ve talked to a lot of lawmakers who are supportive of this effort but unwilling to take a vote because of the implications of voting against a major political force in this state, which is the WEA,” Chisa said.


Hobbs says the attacks by WEA are off target. He cited a Sunday ad in The Herald of Everett that called him out by name and said Senate Bill 6442 will cost taxpayers $45 million. Hobbs said that is an administrative cost and that the plan saves money long term.

“They never say (the $45 million) is over the course of five years for administration. My question for them is how much does it cost the state under the current system?” Hobbs asked. “It’s a lot of money.”

The ad got personal with Hobbs, who is running for Congress, saying the state pays $850 a month for Hobbs’ health care as a part-time lawmaker, while contributing less than half that – $384 – for a half-time school employee.

It is true that the state contributes a $768 subsidy per month per full-time school employee and that many districts prorate the subsidy as a share of full-time status. However, the job of a state legislator is considered 70 percent of full time, which doesn’t compare directly to a half-time school worker.

The WEA calls Hobbs’ proposal a state takeover of health care. But Hobbs’ plan is patterned on the Public Employees Benefits Board, which lets state workers and state retirees pick from more than a half-dozen plans subsidized by taxpayers.

The union says that’s not a fair comparison because of the lower state subsidy for school workers.

Hobbs argues his approach would make insurance more affordable for lower paid bus drivers and lunchroom help, as well as teachers with families.

The state Health Care Authority agrees with Hobbs in part and with the WEA in part. Some teachers would pay more in premiums, but others would pay less.

John Williams, director of the K-12 insurance project at the agency’s division of health care policy, said teachers who choose single-person coverage might pay more – 15 percent of premium costs in a new exchange, which is more than the fraction they pay today.

But the teachers and other employees who cover their families would see their share of premiums for family coverage drop from 73 percent to 35 percent. Long term, premium costs would not fall, but they would grow more slowly than they have, Williams said.

The agency’s insurance consultant, Milliman, also found that $15 million to $20 million could be saved each year by replacing an estimated 1,000 insurance pools in 295 districts and seven education districts with the single insurance exchange offering multiple plans.

But the WEA says the state’s promised administrative savings actually would shift the cost to the worker. The WEA says a new monthly subscriber fee – which kicks in after 2015 and would be between $4.75 and $5.25 per month per worker – would be built into the premiums.

Williams did not dispute that there are startup or administrative costs. But even after accounting for those costs, Williams said the state can see net savings by 2016 if the change takes effect in January 2014.


Hobbs said his proposal is a key to reaching a budget compromise that ends lawmakers’ special session. Rep. Gary Alexander of Thurston County, Republicans’ lead budget negotiator in the House, confirmed that the consolidation idea is still alive.

But Sen. Ed Murray, the Seattle Democrat who chairs the Senate budget committee and co-sponsored the bill, says he no longer supports it because it does not provide savings in the first year. He also doubts it can deal with the inequity in the system, in which some low-paid workers can’t afford any insurance.

In the House, Democrats have balked at the consolidation. House Majority Leader Pat Sullivan, D-Covington, has a different approach that would require school districts to add family coverage for all full-time workers and to create employee pools to avoid disparities in benefits.

House Bill 2666, which would preserve bargaining at the local level, has support from WEA members.

Brad Shannon: 360-753-1688

Jordan Schrader: 360-786-1826 jordan.schrader@thenews Twitter: @Jordan_Schrader

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