Health Costs Obstructing Contract Settlements

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A not-at-all-funny thing has happened to teachers and school districts on their way to the bargaining table: soaring health-insurance costs.

For some four years now, with insurance-price increases striking most places in double digits, wrangling over who should pay the extra has contributed hugely to lapsed contracts, angry public exchanges, and job actions that have shuttered schools.

Of the handful of districts nationwide where teachers were on strike last week, for instance, health insurance was a factor in at least four of the walkouts.

In Illinois District 50 north of Chicago, a spokesman for the union, the Woodland Council of the Lake County Federation of Teachers, an affiliate of the American Federation of Teachers, contended that health-care givebacks would wipe out most of the 16 percent multiyear salary increase the school board was proposing. The strike in Marysville, Wash., has stretched into that state's longest, partly over how rising premiums will be paid in a year when the state has cut back on aid.

And even where talks didn't reach the breaking point, negotiations have been thick this season with concerns over health insurance. On one side, district leaders are worried that the price tag for insurance will bust their budgets, especially as states cut back on local school aid in a soured economy. On the other, teachers fear their contracts may erode both their health coverage and their incomes.

"Costs are going up at such an exponential rate that teachers are having to suffer at the bargaining table," said Carol Malone, a health-care specialist for the 2.7 million-member National Education Association. "I hear this from every state and many different school districts."

Benefits vs. Salaries

Health-insurance premiums this year on average rose about 15 percent over last year, after an increase of 30 percent or more from 2001 to 2002, experts say. Prescription-drug plans have shown even steeper price hikes. The figures reflect to some degree the cost of health care, pushed upward by an aging population, along with new and expensive therapies. Some claim that insurance companies have increased their profits as well.

The vast majority of public school teachers and almost as many education support personnel are covered by private health insurance, according to figures collected for the NEA last year. The same study found that slightly more than 80 percent of full-time teachers and 70 percent of full-time support workers got their insurance from their employers.

Many teachers have traditionally had insurance plans that allowed maximum freedom to choose providers and that cost the teachers little.

In Wisconsin, an insurance corporation set up by the Wisconsin Education Association Council, the state's largest teachers' union, provides "traditional" plans for about two-thirds of the 350 or so school districts it serves in the state.

"Our members have chosen to preserve a high-quality benefit package even if it's meant freezing or reducing salaries to maintain it," said Fred Evert, the executive vice president of the WEA Insurance Corp. Many teachers make a conscious decision, he added, to forgo higher salaries in exchange for good benefits and retirement.

Wisconsin districts, like others nationwide, are trying to get rid of those traditional plans, in Wisconsin's case with help from Mr. Evert's organization, which offers a more "managed" alternative.

'Where the Dollars Go'

Despite a national trend in school districts toward managed plans that generally cost less, anger may run deep when benefits are threatened, as teachers believed they were in the West Chester and Hatboro- Horsham districts in the western Philadelphia suburbs. West Chester had been on strike for nearly two weeks, and Hatboro-Horsham was entering its third late last week.

In the 11,000-student West Chester district, union leaders were especially incensed that the school board had brought in a lawyer with health-care expertise to represent it. He was pushing a switch to a health- care plan that he said would produce at a minimum 5 percent in savings.

"Districts just want to put a brake on health-care costs," said Jeffrey T. Sultanik, the lawyer. "Very often, health-care premiums are the most significant increases being negotiated."

Under the plan, all teachers would pay a share of the health-insurance premium, and more charges would be tied to use.

"In some districts that have just settled [contract talks] around us, teachers have no co-payments," Marianne Ritchie-Polito, the vice president of the West Chester Area Education Association said shortly before reaching a tentative settlement last week. The NEA affiliate had been pressing for a salary hike of more than the board's offer of 16 percent over three years, as well as a less radical change in the health plan. Terms of the settlement were not to be disclosed until both sides ratified the agreement.

Union officials say the situation is not only distressing for teachers, but also bad for their unions. As insurance plans are shorn of different types of free coverage and more competition crops up for available education dollars, union members are divided.

"There's a great deal of discussion, sometimes acrimonious, about where the dollars should go," among members of union locals, said Tom Bilodeau, the research director of the MEA-MFT, the Montana state union that is affiliated with both the NEA and the AFT. For instance, young teachers with families might prefer more health-care coverage, while those nearing retirement might want higher salaries, since their pensions are based on their pay at the end of their careers.

"This issue is too big and uncontrollable," Mr. Bilodeau said. For most districts, "we don't think it can be solved at the bargaining table."

The MEA-AFT, along with other organizations, is proposing a statewide, mandatory pool that would spread the costs of insurance among 16,000 employees.

Vol. 23, Issue 7, Page 7

Published in Print: October 15, 2003, as Health Costs Obstructing Contract Settlements
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