Do the Facts Matter to the Wisconsin Policy Research Institute?
On January 4, 2005, the Wisconsin Policy Research Institute
(WPRI) released a report, "Health Insurance for Wisconsin Public
Schools: The Case for Competitive Bidding." The report alleges
that substantial savings for Wisconsin school districts could be achieved
by forcing all public school employees into the state health plan. According
to the WEA Trust, the report's conclusions are fundamentally flawed
as is its methodology.
By its own admission, the report offers no credible way to save any
taxpayer dollars. Instead, the recommendations of the report would merely
result in the shifting of health care costs to public school employees
by reducing their benefit levels. Below you will find several of the
allegations and misstatements underlying the WPRI report. Additionally,
the WEA Trust will soon release an objective, independent analysis based
on accurate data and sound scientific principles to members of the Wisconsin
State Legislature.
Allegation: By forcing teachers into the state’s
health plan, “total savings across the state is projected to be
over $100 million.”
Fact: By the report’s own admission, NO
taxpayer savings would result by forcing public school employees into
the state health plan. Under the state’s QEO law, and according
to the WPRI report, reductions in health insurance costs would simply
result in corresponding increases in teacher salaries. After taxes,
a dollar in salary increase is worth only about 54 cents to the average
teacher. WEAC agrees that the QEO law may distort bargaining over insurance.
Ending the QEO would trigger more dynamic bargaining in many areas,
including insurance, but teachers should not be blamed for the law's
shortcomings. Instead the law should be changed.
Allegation: Trust insurance is selected through
a “no-bid” process.
Fact: Insurance coverage and the name of carrier is
a mandatory subject of bargaining. Both the employer and the union can
demand to bargain over changes every two-year bargaining cycle. If WEAC
members could obtain comparable coverage for less money, they would
readily change plans, especially under the QEO bargaining law, which
converts insurance savings into salary increases. They keep Trust plans
because they are the best value. WEAC also believes that insurance plans
are best determined through local collective bargaining. Rigid state-imposed
plans typically lack the flexibility to address local needs and problems.
Allegation: WEA Trust health plans are more expensive
than other health insurance options for school districts.
Fact: According to the WPRI report (page 13) five
of the 10 districts with high premiums alleged to save the most by shifting
to the state health plan are not enrolled in WEA Trust plans. The WEA
Trust is a not-for-profit health insurance organization that has the
lowest administrative ratio of any Wisconsin insurer. The WEA Trust
returns 94% of every premium dollar to members in benefits.
Allegation: School districts with WEA Trust health
plans have experienced higher rate increases than the participants in
the state’s health plan.
Fact: Several WEA Trust districts received premium
increases of 0% in the
last renewal period. While the state’s plan boasted a 5% annual
premium increase for state employees, the WEA Trust’s 304 pool-rated
districts averaged only 3.3%.
Allegation: Individual school districts would realize
substantial savings by forcing their employees into the state health
plan.
Fact: WPRI’s figures, based upon the premium
rates for the state pool for state employees instead of the premium
rates for the state pool for local government employees, are misleading
and inaccurate. Despite providing superior benefits, the WEA Trust is
substantially cheaper than available state plans in many districts.
For example:
- In the Florence School District, the report estimates that a shift
to the state plan would save $2,885 annually per employee. In fact,
WEA Trust’s annual family premium rates are $4,176 less per
employee than the only qualified state plan serving the district.
- In the Rosholt School District, the report estimates that a shift
to the state plan would save $1,042 annually per employee. In fact,
WEA Trust’s annual family premium rates are $4,118 less per
employee than the only qualified state plan serving the district.
- In the Spring Valley School District, the report estimates that
a shift to the state plan would save $1,004 annually per employee.
In fact, WEA Trust’s annual family premium rates are $4,089
less per employee than the only qualified state plan serving the district.
- In the Stevens Point School District, the report estimates that
a shift to the state plan would save $1,225 annually per employee.
In fact, the WEA Trust’s family premium is $3,295 less per employee
than the only qualified state plan serving the district.
- A school board member in Burlington also disputed the study’s
findings about purported savings in that district: http://www.journaltimes.com/articles/2005/01/08/local/iq_3311301.txt.
In two of its more bizarre allegations the WPRI report notes “only
the Monona Grove School District and Yorkville J2 School District already
participate in the state plan." Yet a few pages later, the report
asserts that the Monona Grove School District would save $80,406 if
they shifted to the state plan. In a similar
case, the WPRI report claims savings of $76,605 for the Yorkville J2
School District by shifting to the state plan.
What is WPRI’s real agenda?
WPRI's real agenda is to further reduce business taxes. Individual
property taxes used to account for 51% of the total property tax bill;
but now, due to corporate exemptions, individuals pay 68% of the total
bill. WPRI helped to create this inequality and now is trying to exploit
citizens’ resentment of high property taxes to further advance
its pro-business tax agenda. Additionally, the WPRI seeks to reduce
overall teacher compensation. Wisconsin teacher salaries have fallen
from 15th to 22nd in the nation; the impact of this precipitous drop
has been ameliorated to a degree by stable employee health insurance
costs. Now the WPRI wishes to reduce health care benefits. This will
make it harder to recruit and retain high-quality teachers
What is WEAC doing to try to reduce the high
cost of health insurance?
WEAC and WEA Trust have become national leaders in promoting health
care reform. Contrary to the philosophy of the WPRI, WEAC believes our
state's goal should be to improve all citizens' access to high-quality
affordable health care rather than to engage in a race to bottom in
health care coverage. Great Schools benefit everyone, and so does high-quality
and affordable health care.
Republicans target health benefits
Posted January 12, 2005