2 teacher-insurance fixes offered

Beebe sees some ‘good’ in proposals to fight premium leap

Premiums paid by members of the state’s public-school employees’ health-insurance plan would increase by about 10 percent or 16 percent instead of 50 percent, effective Jan. 1, under two options circulated by four key lawmakers Friday.

The financially ailing health-insurance plan needs $54 million more to keep next year’s premiums at current rates, on the basis of estimates from the state’s Employee Benefits Division, legislative leaders said.

A two-page, unsigned memorandum circulated by legislative leaders cited the dollar figure and includes both short-term and long-range funding options and other options for changing the insurance plan.

The chairmen of the House and Senate Education Committees, Rep. James Mc-Lean, D-Batesville and Sen. Johnny Key, R-Mountain Home, and the chairmen of the House and Senate Insurance and Commerce Committees, Rep. Tommy Wren, D-Melbourne, and Sen. Jason Rapert, R-Bigelow, were credited with creating the proposals.

Democratic Gov. Mike Beebe said, “There are some good points in there and it is a good starting point, but there are some other areas that are problematic, and we’ll visit with them about it.”

The governor declined to say which parts are flawed.

One of the options would funnel $36 million from the state’s surplus into the healthcare plan while increasing the premiums for plan members by $18 million, or about16 percent, according to the memorandum.

A second short-term option is to give $43 million of the surplus to the insurance plan while increasing the premiums by $11 million, or about 10 percent, the memorandum states.

The state’s unobligated and unappropriated surplus is about $163 million, budget administrator Brandon Sharp estimated this week.

Under the rates approved by the State and Public School Life and Health Insurance Board in August, the premium for the most expensive and most popular plan for school employees is to increase next year to a maximum of $336 a month, up from $226.70 this year.

A premium increase ofabout 10 percent would increase that rate to $249.37 a month next year, estimated Bob Alexander, director of the Employee Benefits Division.

The monthly premium for family coverage under the plan is to increase to about $1,528, up from $1,029.96 this year. A premium increase of about 10 percent would increase that rate to $1,133.96 next year, Alexander estimated.

Estimated costs if the premiums increased about 16 percent were not available through the Employee Benefits Division on Friday.

Alexander has cited a lack of funding from the state and school districts as the primary reason rates have increased. The plans cover 47,000 teachers, cafeteria workers, janitors and other school employees and their families.

House Speaker Davy Carter, R-Cabot, and Senate President Pro Tempore Michael Lamoureux, R-Russellville, said Friday that they hope to determine by next week whether there is enough support in the Legislature for a measure to fix the insurance plan. If there is a consensus for both short-term and long-term remedies, Beebe has said he will call a special session for the Legislature to pass them.

Last week, Beebe said he’s delaying the enrollment period for the health-insurance plan by a month to give lawmakers, teachers and administrators “some more breathing room” to try to reach a consensus. That means the enrollment period will be Nov. 1-30.

The governor has said he and lawmakers have to find a solution by about Oct. 15 to give the Employee Benefits Division enough time to print enrollment materials reflecting the new rates before Nov. 1. If a legislative consensus is reached by Oct. 15, a special session would be called quickly.

Beebe said Friday that lawmakers “better hurry up and we need to see if there is going to be a consensus” on fixing the plan short-term and long-term.

“Theoretically, you could still do something even after Oct. 15, but it is not a good situation after that,” he said.

“Right now, there is not a consensus. There are pieces for which a consensus appears to be forming, ” Beebe said.

After meeting with about 20 senators late Friday morning, Lamoureux said he felt better about the chances of a solution.

He said there’s a consensus in the 35-member Senate to fix the plan, although all the details haven’t been worked out.

Carter said he expects the memorandum distributed Friday will spur debate about what options lawmakers like and which ones they don’t like.

“I hope to know more the first part to the middle of next week,” he said.

While lawmakers hope to find a fix for 2014, Beebe has suggested splitting up future cost increases, beginning in 2015, among the state, school districts and members of the insurance plan, according to Friday’s memorandum.

The state could contribute $18 million more a year from various funding sources, and school districts could contribute $18 million more a year. Participants in the plan also could chip in $18 million a year, the memorandum said.

Among other things, long-term “structural modifications” for the health-insurance plan include restructuring the State and Public School Life and Health Insurance Board, requiring the board to provide more education to participants of the plan, requiring deductibles for all plans and requiring school districts to send certain state funds to the Employee Benefits Division regardless of their participation rate in the plan, according to the memorandum.

Beebe said lawmakers have told him they like some of the memorandum’s options, but not others.

Front Section, Pages 1 on 10/05/2013

Upcoming Events