Health Insurance Pool examined

By MICHAEL J. MAURER
Record Staff Writer

A state board charged with establishing a single health insurance pool for all Ohio school district employees turned its attention May 17 to a number of existing consortia that provide such health insurance.

Sandra Caldwell, administrative director of the Butler County Health Plan, one of the four largest consortia in Ohio, covering 7,000 employees, said each consortia has developed in its own way.

"When you've seen one, you've seen one," Caldwell said.

In general, she said, consortia are voluntary cooperatives under which school districts have banded together to purchase insurance. Some consortia involve sharing insurance risks, where populations of school districts are combined for purposes of calculating prices and actuarial expectations of expenses for illness, while others are simply administrative agencies that share some costs but maintain independent insurance pools.

In addition to the Butler County plan, the state's four largest include consortia based in Allen and Stark counties and the Southwestern Ohio Educational Purchasing Council.

Board chair Stephen Loebs, a retired professor of health management at The Ohio State University, said a close examination of the existing plans would be essential to the board's mandate under H.B. 66, the state's two-year operating budget bill.

"Consortia are central to discussions we will have later on this year," Loebs said. "We have no idea how successful the consortia are in what they're trying to do and we need to get that information."

In related business during its May 17 meeting, the board discussed a request for proposals under which a consultant will be hired to perform a statewide survey of existing health care options for public school district employees.

Caldwell said there is no centralized information available about existing consortia, but she estimated there are 30 to 35 in operation in Ohio, covering more than 70,000 employees and more than half of Ohio's school districts. The number of covered employees in the plans ranges from as few as 120 to as many as 120,000, she said.

About half of the total number were formed in the 1980s, with the remainder coming later. Several times, Caldwell said, local governments such as townships, have approached the consortia seeking to join them, but in general, such efforts have been rebuffed.

"(Townships and local governments) have come to us and said, 'Can you help us?' But historically, we have felt we were not a homogeneous group with them," she said.

David Manning, an independent consultant whose clients include the Ohio Mid-Eastern Regional Education Service Agency, a purchasing cooperative for 51 school districts, said that while consortia are subject to state audit, there are few requirements for such groups to maintain actuarial cash reserves against expected expenses, as insurance companies are required to do.

"Some of these consortia have very little in the way of reserves," Manning said, noting that the board could not simply compare consortia prices to decide if they are performing satisfactorily.

"Their rates may be low because they have not built reserves, or their rates may also be high because they are trying to catch up," Manning said.

Caldwell said it was also her experience that, although state law requires the consortia to prepare actuarial reports describing their rates, reserves and expected obligations, those reports simply are not used by anyone.

"I used to send it to my treasurers (of the member school districts), but they didn't want it," she said. "In 15 years, in my experience, an auditor has asked to see it once."

As they have in several past meetings since the board was organized earlier this year, board members continued to challenge a basic assumption of the board's creation, namely, that it makes sense to establish a mandatory, single health insurance pool for all school district employees in Ohio.

Board vice-chair Chris Mohr, financial officer for Dublin City Schools, said if the principle of mandatory pooling makes sense for one class of government employee, it makes sense for all.

"Why were we an obvious target?" Mohr said. "If this is a good idea, this is a good idea for everybody."