School health plan bludgeons budget
By ROBERT KING
© St. Petersburg Times, published April 20, 2001
The county's schools are supposed to be in the business of education, but health insurance is cutting deeper and deeper into money available for the classroom.
Nine and a half months into its fiscal year, the school district has blown its $5.8-million budget for staff health insurance by $205,000.
School officials said this latest analysis of their health plan, released Thursday, was worse than expected.
It means that, with 1,850 insured employees and their 350 insured dependents, the district will spend the next 70 days watching its health care debt mushroom. With no private insurer, the district pays its own health costs.
If last year's health costs from May and June are an indication, the health care deficit could top $3-million.
Superintendent John Sanders said the district's recent cost-cutting efforts might mean $1-million or more -- he couldn't be more precise -- will be on hand to offset the debt.
But the rest will have to come out of next year's budget. Money that could otherwise be spent on smaller class sizes, teacher raises or reading programs will instead be diverted to pay for health care that has already been delivered.
Adding to the woes is the fact the school district still harbors $1.8-million in health insurance debt from the 1999-2000 school year. Taken together, the school district could be looking at $5-million in health care debt come July 1.
"I would say that it looks as though our health insurance plan continues to bleed red ink," School Board Chairman Jim Malcolm said. "And we can't continue to do that."
On the surface, it may seem odd that the school district's insurance fund would owe money to the district's general operating budget. Some have even asked why the School Board can't just forgive a debt that, in essence, it owes itself.
But district officials say the state Department of Insurance won't let them write off that debt. Health plans must pay for themselves. If they don't, they have to be scrapped, said Edd Poore, the district's personnel director.
Officials hold on to the hope that the hemorrhaging will stop soon. Earlier this year, coverage benefits were cut and the amount employees must pay out of their own pockets was raised. But so far, those changes have accomplished little.
In February, the first month the latest changes took effect, the district spent $806,000 on claims. In March, the cost was nearly $600,000. Three weeks into April, the cost is $521,000 and growing. All for a plan that was supposed to cost no more than $500,000 a month.
Now a new problem looms.
Since November, the district has tried to collect $1-million in backup insurance from Sun Life of Canada. The money was supposed to offset last year's deficit. But Sun Life has balked at paying. Now lawyers have entered the dispute.
In sum, health insurance is proving to be a major headache.
"It's driving me crazy," Poore said. "I've never seen anything so frustrating in all my life."
The search is on for relief.
The district's health care committee -- comprised of teachers and support staff -- is scheduled to meet May 1. But Poore, who was still digesting Thursday's cost report, said the problem might warrant an earlier meeting.
He said the district might have to cut benefits and raise costs again immediately. It would be the third such adjustment this year.
Beyond that, officials wonder about the future of health insurance for school workers.
Already, they expect the cost of insuring a single employee to go up 10 to 30 percent. Part, if not all of that, would have to come from employees.
Teachers union president Jo Ann Hartge said she fears healthy teachers will drop the coverage and take their chances on continued good health if the costs go up much more. And if only sick employees are left, the plan will only get more expensive.
So far, there's no serious talk about ending health benefits. It would put the district at a competitive disadvantage in recruiting teachers and other employees.
But there is growing sentiment that the benefits are too generous.
At a meeting Tuesday, board members Gail Coleman and John Druzbick pointed out that many businesses don't offer health benefits to part-time workers, yet the school district does. Employees with pre-existing conditions also are covered. That's not done universally.
Malcolm, the board chairman, said it might be time to re-examine the benefits, which have changed little with the times.
At a minimum, some board members are willing to look once again to private companies for health coverage. Rising costs and poor service led board members to decide two years ago to go with an insurance plan they govern themselves.
Coleman, who joined the board in November, has been advocating drastic action to keep health care costs from skyrocketing. Otherwise, she said at Tuesday's meeting, "There's no hope in sight. There's no relief."
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