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School insurance pooling bill up in the air

School officials throughout state calling for another study on insurance pooling
by: , Read more ReThinking Portland stories on regional health issues by clicking the ReThinking Portland tab on the right side of The Times home page.

Oregon State Sen. Ryan Deckert, Beaverton Democrat, liked his bill for a statewide school employee health insurance pool a lot more before people started taking sides for and against it.

Five years ago when Deckert first introduced the idea, he says it wasn't as politicized as it is today.

The concept was simple and not entirely new. Pool all of the school districts in the state together into one insurance pool, appoint experts and those knowledgeable in insurance rates to an Oregon Educators Benefit Board that would leverage the sheer size of the pool and get better rates on insurance plans. The concept would save money statewide and allow more money to stay with each individual school district that could be redirected back into the classrooms.

But even as Senate Bill 426 is rapidly making its way through the Senate - 'at breakneck speed' one opponent noted - the bill is causing a small flurry of concerns from school districts and the Oregon School Boards Association. A primary concern is that the state hasn't actually done a study to determine exactly how much money if any the insurance pooling could actually save.

To Deckert, insurance pooling works. States like Michigan, Minnesota and Pennsylvania have all completed studies about cost savings for school employee pooling plans. Each study showed significant savings are possible through statewide pools - a 2004 study for Pennsylvania showed that the state could have saved about $585 million in 2003 health care costs through school employee pooling.

But opponents and those leery of Deckert's bill are asking that if studies have been done for other states why not Oregon, just to confirm cost savings.

Thursday night the Tigard-Tualatin School Board approved a resolution addressing the board's concerns about the statewide health insurance pool and asking for an independent third-party study.

In November 2006, the Beaverton School Board came out in opposition of the proposed bill citing that officials were afraid that the bill would actually cost the school district more money.

The biggest problem for the Tigard-Tualatin district and other districts throughout the state is that two organizations that represent the interests of education - the Oregon School Boards Association and the Oregon Education Association - have reached two very different conclusions about the bill.

OSBA opposes SB 426 and contends that the bill could cost schools $99 million or more a year than with their current employee insurance plans (those numbers are based on comparisons with the state's other insurance pool plans for public state employees handled by the Public Employees Benefit Board).

OEA, however, believes that SB 426 will save school districts money. OEA also readily points out that the bill will 'take money away from special interests.' The 'special interests' OEA is referring to is OSBA.

OSBA's Health Insurance Trust pool insures about 64 percent of all school employees in the state - roughly 37,100 people - according to testimony given by OSBA executive director Kevin McCann during a senate committee meeting in early February.

And from that pooling, OSBA receives a brokerage fee to cover administrative costs of about $2.5 million, said OSBA Associate Executive Director Ron Wilson. That fee covers about half of OSBA's entire budget.

Proponents of the bill have gone full force against OSBA's stance citing the multi-million dollar fee as the only reason for the association's opposition to the bill. But Wilson said OSBA is very careful when it comes to the fee and added that the association simply wants to make sure school employees get the lowest possible rate on health insurance.

And with the cost of health care continuing to skyrocket across the country, the lowest rate for insurance plans is Deckert's only concern as well. But as far as another study on how Oregon could be affected, Deckert said it won't happen.

'We can't give a 'this is what's going to happen,' because we can't predict who's going to go on the board,' said Deckert.

According to SB 426, the governor would appoint Oregon Educators Benefit Board members. Those board members' talents and expertise in the health care insurance area will determine just how good of a deal and how much money could be saved, Deckert said.

But the wait-and-see tactic is not one that most school district officials are comfortable with.

'In this state anytime there's going to be anything done that changes state funding for schools, the state has always done a run for how it will affect school districts,' said Tigard-Tualatin Superintendent Rob Saxton. 'They generally tell us down to the penny how it will affect us. (State legislatures) haven't done any of that in this issue.'