WPRI Report is 'Illogical,' Craney Says

A conservative organization's conclusion that the way public school teachers select health insurance carriers needs to be changed is "flawed and illogical," according to WEAC.

A Wisconsin Policy Research Institute paper claims the WEA Insurance Trust has an unfair market share and state taxpayers could save money by making changes.

"Instead of demonstrating why the system needs to be changed, the report in fact demonstrates why teachers are well served by the Trust," WEAC President Terry Craney said. "The WEA Trust is an extremely efficient and competitive company that provides outstanding insurance programs to educators. Our members need and deserve good medical insurance, given the fact they work directly with large numbers of children and are exposed to many health risks."

WPRI is claiming that because school districts and teacher unions negotiate health insurance, the WEA Trust has an unfair advantage and stifles competition.

"In fact, it has an advantage but its advantage is based on its efficiency and high customer satisfaction," Craney said. "The Trust is one of our nation's most efficient insurance companies. This efficiency has allowed the company to develop nationally recognized prevention programs that keep our members healthy and reduce costs."

Craney said a WPRI suggestion that taxpayers could save millions of dollars if teachers used the state employee insurance plan is "groundless."

Craney said research shows WEAC members pay little more for their current plans, which allow them to choose their health care providers, than state employees pay for their more restrictive HMO plans. He added that it is ironic that much of the WPRI report is based on insurance costs for the Milwaukee, Madison, Racine and Green Bay school districts, none of which are covered by WEA.

"Much of the WPRI criticism of WEA is that it produces larger surpluses than other companies," Craney said. "What WPRI does not say is that the Trust is a non-profit entity. Its charter prevents it from making a profit. Any surplus must be returned to members through reduced premiums or improved coverage. WPRI also does not reveal that WEA uses more conservative accounting principles than many big insurance companies because it tries to guard against sudden premium increases that would harm school district budgets as well as employees."

Craney said the WPRI report is an attack on collective bargaining.

"We believe school districts and their employees are much better suited to determine the cost-effectiveness of insurance plans than a conservative group whose agenda is largely driven by corporate donors," he said. "Calls for 'reform' make no sense. The current system works well by providing high quality insurance coverage to school employees. Teacher compensation is composed of salary and benefits. One of the reasons the Trust was created 30 years ago was to provide high-quality health care at a reasonable price. That goal has been accomplished."

Craney added that in the current era of competing market forces, good health coverage is one of the few benefits that keeps teachers in the classroom instead of leaving for higher paying jobs elsewhere.

"And it seems very ironic that a conservative organization is calling for a government take-over of a system that is now under local control," he said.

WPRI was established in 1987 with a grant from the Lynde and Harry Bradley Foundation.

The Institute conducts research on public policy in Wisconsin with an emphasis on free markets and private enterprise.

It consistently issues "reports" attacking public education, teachers and organizations like WEAC.

WPRI depends on the Bradley Foundation for about two-thirds of its revenues.

In 1995, the Lynde and Harry Bradley Foundation gave WPRI $460,000, along with $17,500 from the John M. Olin Foundation and $1,000 from the Roe Foundation.

The Bradley Foundation is an outspoken critic of public education and an advocate for private school vouchers and the privatization of public education.

Posted December 19, 2000