More about Insurance (a rational explanation of the changes in insurance which I have few complaints with)

12-17-99 My Response
1. By now nearly everyone has made a decision 'in regard to health insurance coverage. That does not mean however that everyone is happy. Many members still have questions and concerns. Much of the recent General Membership Meeting was devoted to a discussion of health insurance. I would hope that those who attended were provided some insights. For the benefit of those not able to attend the meeting I thought it wise to give a summary of the information shared. Please bear in mind that it is difficult to encapsulate nearly two hours of discussion.

Let's start with positives. Have we gained anything? In the last negotiations the district agreed to increase its portion of the amount paid for family insurance from 50% to 60% of the additional premium. Second, the district also agreed to pay 75% rather than 50% of any increase in cost for family insurance during the contract period. As well, the bidding process served to contain increases in cost., Had the insurance not been bid, the increase for the base plan would have been greater. I realize that this is of little comfort to those formerly taking Blue Plus family.

What remains the same? 2.We continue to have an excellent health insurance program. As well we should note that the school district will pay nearly $240,000 more than last year. The actuary we hired has indicated that the MCS 2 plan is equal to or slightly better than the former Aware Gold. This is the base plan for which we negotiate and it provides an excellent level of benefits. The district will contribute $269 for single coverage and $578 for family per month. I have included a comparison done by the Osseo local of single and family coverage in the 15 Hennepin County schools and Anoka Hennepin. As you can see, we would rank third in single contributions per month, but please note that the two districts above us contribute the same amount for either single or family. Thus for our plan in Orono the employee would pay $409/ month for family coverage. in comparison of district pay for family coverage, our $578 would rank first. However we should not lose sight of the fact that most of these districts have higher salaries.

What was lost? This is obvious. We lost the ability to opt down to a less expensive plan. No longer can members choose the HMO with a lower level of benefits at less cost to the members.

What should we consider? A number of things. If we were to have had a cost differential allowing the ability to save money by choosing the less expensive plan, we would have had to be able to force the district to accept the Blue Plus bid. Blue Cross offered Aware Gold at $3.26 single ($58 over Medica) and $925 ($144 over Medica), representing an increase of $65 and, $189 respectively. The Blue Plus bid was $270 single and $758 family, representing an increase of $65 and $152 respectively. Acceptance of this bid would require an employee payment of $266 for the Aware Gold level of dependent coverage and $101 for Blue Plus dependent coverage. Thus the cost for family coverage under Blue Plus would have been about $85 less per month than it now is with the Medica MCC. However, the additional cost to the district would have been in excess of $8001000.

An increase of an additional $800,000 is about equal to 2% of salaries. This would obviously have an impact on our ability to negotiate.

It is unfortunate that a part of the consideration of the bids did not involve the effect on employees insurance payment. Although a person may understand what happened and why, it provides little comfort when one has to come up with another $130 a month out of pocket. 3. I feel particularly sorry for members near the bottom of the salary schedule who have dependent insurance.

What can we do? Our Insurance Committee has already met to consider options. We plan to ask to have the plan bid for next year. We may want bids with two or three person dependent coverage. We are looking at other type of plans and options.

4. We are all frustrated. I realize that some members blame the union for what has happened. Some blame me. I understand the need to blame someone. Please however do not blame the negotiating team. The team included the chair of the insurance Committee. Our chief negotiator was Bob Prosen. Bob is the Education Minnesota insurance expert. 5.I blame the district for the way the joint Labor Management Committee functioned and how bids were done. I don't blame them for seeking to limit cost increases. I do blame Blue Cross for the bid they submitted. However, even Medica had a high bid for the Blue Plus level of coverage. Usage in this plan was up. The experience was not good. It showed in the rates. Beyond experience and usage is the fact that medical costs are rising at a rate which is difficult to comprehend. I do not know who to blame for this.

6. What is the bottom line? Reality. For a long time we have been able to have a system of benefits which protected us from large increases in employee payments. We have had and continue to have an excellent level of benefits. The cost for this has been there all along. The plan had to be bid. It is required by law and common sense. Meanwhile the constant increases in insurance costs has caught up with us.

Frank Wanner




Single Insurance Amount (dollar amount paid);

St. Louis Park$236
Brooklyn Center$195
Eden Prairie$176
St. Anthony$153

Family Health Total Per Month (dollar amount pd)

St. Louis Park$503
Mound $486
St. Anthony$463
Brooklyn Center$454
Eden Prairie$348

*We believe this is not the full amount.

1. What follows is a rare exception. Its a useful newsletter with important information and only one small dig at the "district."













2. And the School Board never wanted anything less than this.






























3.On the other hand, at the School Board's insistence, the rate of pay for the least senior teachers was raised significantly.




4. This is a noble attempt to sheild innocent parties from blame for an inevitable change in insurance.



5.There had to be at least one shot leveled at "the district." I wonder why Frank doesn't realize that he's part of "the district."






6. Amen