Initiative backs school insurance changes

By Tim Martin

Associated Press



Frustrated by the high cost of providing health insurance for their employees, a group of southwestern Michigan school districts have joined forces in an effort to save money.



The initiative to form a regional insurance pool could become a focal point in the debate about recently introduced state legislation aimed at reducing health care costs for Michigan schools. Senate Republican supporters of new bills plan to hold hearings within the next few weeks. Their effort is supported by some labor unions but is opposed by a group affiliated with the Michigan Education Association, the state's largest teachers union.



Containing health care costs in public education has become a hot topic in the state Legislature, although so far efforts at major reform have fizzled.



In many school districts, health care coverage is the second biggest piece of the budget, trailing only employee salaries. Health insurance eats up about 15 percent of the budget in East Grand Rapids Public Schools, one of 14 districts in and near Kent County to launch a self-insurance pool in September after three years of preparation and gaining necessary approvals. The pool covers about 1,100 employees - mostly nonunion administrators - and participants say it could save about 8 percent in health care costs this year.



"With the starting of our pool, we feel we can start to contain health care costs better," said Doug Derks, an East Grand Rapids assistant superintendent. "But there could be something done to try to make the process a little easier."



Supporters say bills introduced by Republican Sens. Shirley Johnson of Troy and Wayne Kuipers of Holland would allow districts to eliminate bureaucratic hurdles associated with setting up regional pools and spark more competition among insurers. They say their plan would retain unions' bargaining rights and preserve benefits.



The legislation would establish a statewide fund to cover catastrophic claims and provide a focus on wellness and preventive care.



"The money this saves would go back into education - to hire more teachers, for pay raises, to buy textbooks or technology," said Kuipers, chairman of the Senate Education Committee. "Schools will get this money back."



But the Michigan Education Special Services Association says the legislation is unnecessary, risky and a Republican attack on the state's largest teachers union, the Michigan Education Association. MESSA, an MEA affiliate, provides plans that cover about 55 percent of the state's K-12 and community college employees.



Pooling coverage saves money on administrative costs and has other benefits that come from having more people covered in the same plan, supporters say.



But MESSA says it already provides pooling advantages in Michigan. "It's politics," Gary Fralick, a MESSA spokesman, said of the reform efforts. "I think they saw an opportunity to try and divide the house of labor."



Fralick said Republicans have been trying to damage MESSA, and by extension the MEA, for more than a decade.



But other labor groups, including the American Federation of Teachers and the International Union of Operating Engineers Local 547, support the legislation. The bills are based partly on reforms suggested by the groups this year.



The groups say MESSA will survive if its business is truly competitive. "If MESSA provides a quality product at a competitive price, MESSA will be alive and well," said David Hecker, AFT Michigan's president.