Dear Arkansas Educators: Read and be informed! Please join us for this meeting tomorrow night( Wed, 9/4) if you can. Paragould, AR, Green Co. Tech High School, 6pm. This Super knows his stuff! "Teacher insurance program must be reformed By Jerry Noble, Guest Columnist Health insurance is a very important and hot topic these days, especially when it comes to the school employees in the state of Arkansas. I am currently the superintendent of schools at Greene County Tech in Paragould. I have been in the school business for 40 years, and I must say that the manner in which the Employee Benefits Division deals with health insurance for school employees in the state of Arkansas is very puzzling to me. For one, it would seem to me that a group as large as ours would have insurance companies competing for our business. Instead, we have a self-funded plan that I believe is being poorly managed because there is no effort to try to control over utilization and rate increases. Even worse, I believe that school employees are being forced to subsidize richer plans for the non-school state employees. I will explain. If I understand correctly, the EBD manages several groups through a self-funded plan. Although the plans that are offered to each group are the same, I am not sure the rates are the same. Those employed by the schools must pay most of their premium while other state employees have most of their paid for by the state. By operating in this manner, an injustice is being done to the school employees by forcing them to subsidize the higher premium costs of the non-school employees. By this I mean that since the non-school employees have most of their premium paid for them, they will naturally take the most costly plan — the plan with the best benefits. It has been proven that rich benefit plans lead to over utilization and higher premiums. The higher premiums have forced school employees to take the less expensive plans; however, as I will show you later, we are being penalized for doing so. The EBD offers state employees a choice of three plans. The rich Gold Plan with low deductibles and office/drug copays, the medium plan or Silver Plan with higher deductibles and copays, and then the Bronze Plan, which is a Health Savings Account that has higher deductibles and no copays. I can tell you without a doubt that for someone who is paying their own insurance premiums, the Bronze Plan will save you money. The reason is because of the difference in the cost of the premium. I can also tell you without a doubt that if someone is having most of their premium paid for them, they will take the Gold Plan. Here is the injustice. This past year, more school employees were forced to take the Bronze Plan because of the difference in premium cost. As a result, the EBD received fewer premium dollars. This caused a shortfall. Now the goal of the EBD is to increase the premium on the Bronze Plan by more than 300 percent in an effort to encourage “more healthy people” to take the Gold Plan so the EBD can receive more premium dollars. This makes no sense at all. First of all, what healthy person would take the Gold Plan if he or she is required to pay for most of the premium? In fact, there is no scenario I can find where even an unhealthy person would benefit financially by taking the Gold Plan if he or she must pay most of the premium. The reason is because they are going to reach the deductible anyway and will save more than enough on premium costs to make up the difference. Secondly, encouraging people to take the Gold Plan will only serve to drive up rates even further because of over utilization. This is a proven fact in the health insurance business. The EBD has it backwards. They evidently understand that the school employees are better off financially to take the Bronze Plan. So their philosophy is to collect more premium dollars by increasing the premium on the Bronze Plan to the point that more people will take the Gold Plan, thus more premium dollars will be collected. They are hoping the premium dollars collected from school employees will be enough to allow the EBD to continue to fund the Gold Plan for other state employees! In the meantime, renewal rates will continue to escalate. I find this philosophy to be very irresponsible, and it sends the message that they have no concern for the hardship placed on many school employees. The great majority of school employees can’t afford to pay more for what is already minimal coverage. In fact, we have a lot of school employees who work just for the health insurance. Now that they can no longer afford it, they may as well quit and draw unemployment. Do not be surprised if many do this. The EBD needs a plan to help control rates. Instead, their plan is to force school employees to pay more and ask the Legislature for more money. In order to control rates, the EBD needs to encourage the state employees to take the Bronze Plan not the Gold Plan. How do you encourage people to take the Bronze Plan? For one, in order to be fair, the state needs to pay the same percentage of the premium cost for all employees and not just non-school state employees This gives everyone incentive not to over utilize the insurance, which is one major reason rate increases are out of control. Secondly, when computing renewal rates, base the increases on the loss ratio of each particular plan and apply the increase to them separately. Again, the EBD has done just the opposite. They applied the largest rate increase to the plan that had the lowest loss ratio. Not only will individual members benefit, but the taxpayers of the state, who are paying a part of this bill, will benefit because this will reduce the amount of funding required to support the program. This is a multi-million dollar business. The EBD needs to send people out to the schools and the state offices and educate the members as to what they can do to help control rates. The EBD has not bothered to educate the members. In fact, it appears to me that as little information as possible is provided to the members of the group. Finally, if the EBD does not have the time, energy or know how to work toward lowering health insurance rates, allow the school employees to separate and form their own group. We can do better. Jerry Noble is the superintendent of Greene County Tech in Paragould. By Jerry Noble, Guest Columnist Health insurance is a very important and hot topic these days, especially when it comes to the school employees in the state of Arkansas. I am currently the superintendent of schools at Greene County Tech in Paragould. I have been in the school business for 40 years, and I must say that the manner in which the Employee Benefits Division deals with health insurance for school employees in the state of Arkansas is very puzzling to me. For one, it would seem to me that a group as large as ours would have insurance companies competing for our business. Instead, we have a self-funded plan that I believe is being poorly managed because there is no effort to try to control over utilization and rate increases. Even worse, I believe that school employees are being forced to subsidize richer plans for the non-school state employees. I will explain. If I understand correctly, the EBD manages several groups through a self-funded plan. Although the plans that are offered to each group are the same, I am not sure the rates are the same. Those employed by the schools must pay most of their premium while other state employees have most of their paid for by the state. By operating in this manner, an injustice is being done to the school employees by forcing them to subsidize the higher premium costs of the non-school employees. By this I mean that since the non-school employees have most of their premium paid for them, they will naturally take the most costly plan — the plan with the best benefits. It has been proven that rich benefit plans lead to over utilization and higher premiums. The higher premiums have forced school employees to take the less expensive plans; however, as I will show you later, we are being penalized for doing so.
Posted on: Wed, 04 Sep 2013 04:48:42 +0000
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