A measure intended to streamline and standardize health insurance for Washington’s public school employees has proved to be among the most opaque and divisive issues taken up by the Legislature this year.
The bill would move more than 100,000 school employees and their family members from a system where more than 1,000 bargaining units in 295 school districts negotiate the worker’s share of premiums to one where a single state board with both union and management representation does so.
Gov. Chris Gregoire confirmed Friday that the measure is among those in play in the ongoing special session budget negotiations, though she declined to discuss her position on it.
The proposed new system would be run by the state’s Health Care Authority, which oversees the Public Employees Benefits Board, under which upward of 200,000 state employees and their dependents are covered.
Aside from an estimated $22 million needed to set up the program and a potential $20 million to $25 million in annual savings from reducing the role of insurance brokers, no one can reliably say what, if any, savings would result from an overhaul of the $1.3 billion system.
This is largely because insurers, school districts and the Washington Education Association – the state’s powerful teachers union – declined last year to disclose to the Health Care Authority details of how the money in the current system is spent.
Premera Blue Cross, which covers 60 percent of those insured under the school districts, said its spends 6 percent of the premiums it collects from the state, school districts and school employees on its administrative overhead, which it notes is well below the industry average.
Without a breakdown of how that money is spent, said John Williams, who oversaw the HCA’s study on the proposed overhaul, “we have no way to validate that that is an accurate figure.”
The HCA was also unable to assess whether there were savings to be found in how Premera and other school employee insurers pay for medical care. As a result, Williams said, his group couldn’t estimate how much the proposed new system would cost.
Williams said the HCA asked school districts for aggregated data that would not have revealed any personal medical information.
In a letter to the school districts sent last September, WEA President Mary Lindquist said the union had “significant concerns as to the privacy of this information, its proprietary nature, and how this information could potentially be disclosed to other parties in the future.”
She encouraged like-minded districts to echo these concerns to the HCA.
With the bulk of potential costs and benefits of the proposed new program obscured, the proposal’s more tangible elements have left the state’s two largest school employee unions bitterly divided.
The WEA, which represents roughly 60,000 schoolteachers and about 12,000 school support staff, poured $176,000 in January and February into its effort to defeat the measure.
Most other school employee unions have lined up behind the WEA in opposition to the bill. An exception is the Public School Employees of Washington, representing 26,000 mostly lower-paid school support staff, which has spent about $75,000 on efforts in support of the plan, not counting lobbyist fees.
Noting that the WEA partners with Premera to offer school workers the insurer’s menu of plans, PSE spokesman Rick Chisa asserted that his rival union is dug in against changes out of self-interest.
“The WEA is so opposed to this because they stand to lose a major financial business venture with Premera,” Chisa said. “If you control 60 percent of a $1.3 billion market, there’s got to be millions of dollars at stake for the WEA.”
Premera and the WEA both deny that the teachers union benefits financially from affiliation with the insurer.
Premera Spokesman Eric Earling said critics may be confusing the WEA with school districts, which receive a 10 percent discount from the insurer for only offering their employees its suite of plans. Of the state’s 295 school districts, 212 offer only Premera plans, helping account for its dominant market share.
“That’s obviously different, however, than a ‘financial relationship’ or whatever some people have implied,” Earling wrote in an email.
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