School District Employees Deserve Break from Rising Insurance Premiums

Tim SweeneyJust before the close of the 2015 fiscal year at the end of June, the state released a 24-page report examining the costs of Georgia’s State Health Benefit Plan. That is the health insurance plan for state employees, teachers, and other school district employees. The report is a requirement built into Georgia’s Amended 2015 budget and was produced by the international human resources consulting firm Aon Hewitt. It compares the state plan’s overall costs, as well as costs borne by employees, to other  state employee plans in the southeast deemed comparable, including the health plan serving Georgia’s University System employees. The report also provides some analysis of the financial issues Georgia’s plan administrators must weigh on behalf of Georgia’s 180 school districts’ bus drivers, lunchroom workers and other non-certified employees. This all came to a head as a response to the 2016 budget’s provision to increase charges to school districts on behalf of these employees.

The report notes geography, demographics and the number of dependents per employee are among the external factors that explain why Georgia’s plan costs run fairly high compared to the other plans. However, it is important to note the report finds no amount of adjusting offsets the fact that state employees and teachers in Georgia bear a greater financial burden for their health insurance than their counterparts under most of the comparison plans.

Overall employee costs ran higher than each of the comparison plans and came in nearly 30 percent higher than the average across the comparable plans examined. The consultant adjusted for geography, demographics and adult dependents, which improved Georgia’s ranking, but still left costs for participating employees as the second highest of the seven plans examined, or 17 percent more than the average across the plans. Out-of-pocket costs registered 22 percent higher than the average, even after Aon’s adjustments.

Georgia plan administrators acted many times in the past decade to move employees into plans with higher deductibles in order to reduce overall costs to the plan itself. The state tweaked monthly premium support to encourage employees to select high-deductible plans, for example, but in 2014 the state eliminated traditional Health Maintenance Organization-type plans and participating workers were pushed to participate in an Health Savings Account-type plan. Such a switch in coverage often means an unplanned change in doctors. The HMO-style options returned in 2015, but switching back to such a plan required workers to change their insurance carrier and potentially their doctors yet again.

The Aon report also offers a handful of options for state policymakers, a few of which should be highest on the priority list for policymakers looking to improve the value of the plan for the 650,000 Georgians enrolled. The consultants discuss delivery system reform, such as increasing care coordination and the movement towards Patient-Centered Medical Homes. The report notes these options are not broadly available across Georgia. It is worth noting that a plan with pockets as deep as the State Health Benefit Plan could be in position to help drive improvement in these fields with increased focus and investment.  The report also cites the potential of on-site health clinics to help reduce costs. Those could be a very useful tool in metro Atlanta and other areas with concentrations of state workers.

Finally, the report acknowledges policymakers can increase the share of the costs borne by the employer in order to reduce employee costs. Increasing the share paid by the employer would raise costs for state agencies and local school districts and that could be a tough task. But Georgia’s state and school district workers are already subject to both higher than average premiums and higher than average out-of-pocket costs, according to the Aon report. State health officials should pay heed to Aon’s findings as they plan for next year’s insurance coverage. At the very least, the findings in this report should persuade them to see that state employees, teachers and other school district workers are already paying more than their share.

 

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