In a recent email Booneville Schools Superintendent John K. Parrish warned school board members they may be getting some calls.
The subject, he said, would be recent hikes to teacher insurance premiums.
Some board members reported no such inquiries during last week’s school board meeting but board president Bobby Cobb said he had received about four such calls. Stacey McCollough said he had received several.
Parrish said a school employee who is the sole source of insurance for a family, opting for the lowest level of service – plans are rated as gold, silver and bronze – is being subjected to a 66 percent increase in teacher premiums.
The average rate for increases is about 50 percent. In August a state board approved the hikes. For the gold plan the premium jumps from $227 for $336 per month. For a family plan the amount is reportedly going up from $1,000 to $1,500 per month.
That’s for a plan that covers about 83,000 people, including 47,000 teachers and staff, and their families.
Booneville Junior High Principal Scottie Pierce attended last week one of an ongoing series of meetings this year to try to address the skyrocketing premiums.
Parrish said there are likely a number of reasons for the price jumps. He said he attributes 6 to 7 percent to the affordable healthcare act commonly known as Obamacare.
The biggest factor, Parrish said may be that each state is “boarded up” because only in-state providers are eligible to provide the coverage. Recent use may be another factor he said.
“What happened as best I can tell is there are a few more than normal catastrophic expense (cases),” he said.
Another factor, Parrish said, is that most school employees are females and are of child-bearing age.
“One issue you may hear, is a teacher may say if I went to work at the courthouse, my insurance would have only gone up 1 percent,” Parrish told board members. “I didn’t know until recently that teachers are not considered state employees (for insurance purposes),” said Parrish.
In the end, Parrish said, he expects the state will “throw some more money at it. I don’t know how much that will be.”
Parrish said last week if that happens, rather than a 2 percent increase in funding in coming years, he can see that amount being reduced to make up the expense.
The Legislature this year voted to allocate $8 million in end-of-the-year General Improvement Funds to help prop up the teacher health insurance benefits program after hearing that the fund had been depleted in 2012 because of a number of catastrophic claims.
Gov. Mike Beebe met with legislative leaders Thursday and plans to present them with a list of possible options for addressing soaring teacher insurance premiums next week, his spokesman said.
Beebe has said he would would not call a session until lawmakers can agree on a long-term plan.
Sen. Jason Rapert, R-Conway, who attended the meeting with Beebe, said he agrees with the governor’s approach.
“The governor has clearly articulated, and I am agreement … that we want to do what we can to stop the spike in the insurance premiums that are coming one way or another,” Rapert said. “But the only way we will agree to do that is take the authority and actually get some long-term systemic changes, because if you don’t, the plan will continue to get even worse.”
Rapert said lawmakers the governor to help come up with acceptable solutions because addressing the problem will require consensus. He said he would prefer that the Legislature meet in special session before the end of the year – the new insurance rates take effect Jan. 1 – but is not sure that will happen.
Last month, the state Employee Benefits Board voted to raise health insurance premiums for teachers and other school personnel by nearly 50 percent in some cases on Jan. 1.
During a meeting of the Senate and House education committees and insurance and commerce committees this week, officials with the state employee benefits division discussed the reasons for the recommended increases.
Bob Alexander, director of the division, and Doug Shackelford, deputy director, also said it would take $53 million in new money to avoid the projected increases and keep premium rates at current levels next year.
The Legislature this year allocated $8 million in end-of-the-year General Improvement Funds to help prop up the teacher health insurance benefits after learning that the fund had been depleted in 2010 because of a number of catastrophic claims.
After Monday’s meeting, Rapert, who is chairman of the Senate Insurance and Commerce Committee, suggested the governor call a special session and use $53 million of the nearly $300 million government surplus to keep the rates as they are until lawmakers can find a way to keep the premiums from continually rising.
The governor said during an interview Wednesday that rolling back what will amount to $140 million in tax cuts by 2015-16 was among the possible ways to address the issue.
Beebe’s spokesman Matt DeCample said Thursday that the governor “is not advocating” the roll back in tax cuts.
“He mentioned it with a list of other things to make the point that whatever solution lawmakers come up with is going to cost money … and that’s something that needs to be taken into consideration when you are looking at long-range solutions,” DeCample said.
He said the governor “wants a least a strong framework for a long-term solution before he is willing to consider a special session.”
Rapert said Thursday his idea of using one-time surplus funds is still viable, but that he and other lawmakers agree that they “don’t want to put all that cash into a program that is going to need even more in just a few months or years, so it’s a matter of how much you put in there.”
He said teachers could see their premiums rise in January, but much less than currently projected.
“I’m not confident at all that we will be able to put in the money required to keep the premiums stable, especially when most people in Arkansas, in may different arenas … are going to see their premiums go up, but we at least might make them more manageable,” he said.
“My personal opinion is, we know we can handle the short term and I have asked that we focus on long-term solutions that can be agreed upon first, but help craft policy that will allow us a window, a time frame, to enact some of those larger reform options,” he said.
According to a former legislator the roots of the problem run deep.
Discussing the landmark Lake View decision, Jim Argue, who served in the Legislature from 1991 to 2009, got around to its role in the current insurance issue.
Argue said the state has a history since Lake View of making “minimal” annual adjustments to per-student funding and has allowed teachers’ health insurance premiums to become “ridiculously high.”
Rob Moritz of the Arkansas News Bureau contributed information used in this report.