Kalispell school district employees are seeking bids by new insurance providers after learning their health coverage costs are scheduled to increase by 30.5 percent this year – potentially putting a deep dent in the paychecks of school employees.
The increase to renew the policy, through the Montana Unified School Trust (MUST), comes on the heels of a 20 percent increase in rates the previous year.
“Last year, yes, we knew that we would have a higher increase and that was based on claims,” Karen Glasser, the human resources director at Kalispell Public Schools, said. “This year we were not expecting this high of an increase because our claims are better.”
According to Glasser, if the school district decides to renew its policy through MUST, the approximately 670 employees who receive health insurance would see increases in cost ranging from $120 to $250 per month, depending on the plan. That amounts to an increase of up to $2,500 in health care costs annually for employees on some of the more expensive plans.
For a full-time employee, the school district contributes $518 per month to their health coverage. The employee then chooses their health plan, taking into account how much more than that monthly contribution they can afford. The cheapest plan, which costs the employee about $12 per month, will rise to $140.
While the health care increase will reduce the take-home pay of all school district employees, it falls most heavily on those who aren’t teachers, but who are essential to the public education system: the custodians, cafeteria workers, bus drivers and administrators in non-faculty positions. Some part-time cafeteria workers who take home about $400 a month could see a $250-increase in the cost of their insurance, Glasser said.
“The people that this is going to hit the hardest are the bus drivers, food servers,” she added. “It’s going to take one-third to one-half of their paycheck.”
As the Elementary and Secondary Education Act coordinator for the Kalispell School District, Cissy Booth oversees federal funding and requirements for grades K-12. The increase in health care costs has not taken her by surprise, but she doesn’t see much choice other than to pay more for less coverage.
“This job provides the health insurance for my family so I’m going to continue to get it – that’s the only option I have,” Booth said. “I’m sure I won’t be able to keep my current plan; we’ll go with a plan that has less coverage.”
She has two college-age kids who wear contact lenses, making eye exams a necessity, along with other annual check-ups. Her family pinches pennies at home, never turning the thermostat above 60 degrees, so the increase in costs is going to hurt.
“I don’t see an income increase in the near future to be able to offset this, so it’s a really good question: What are we going to do?” Booth said. “It’s not like I can cut a vacation or not buy the new car because we already don’t do vacations and I don’t have a new car.”
Yet Booth is still grateful for the coverage she has.
“I just feel really fortunate that I work for the school district, that I work for an organization that provides health insurance,” Booth added. “If I didn’t, I don’t know if we would have health care.”
Facing similar or worse health coverage increases, dozens of Montana school districts among the 230 in MUST are also seeking bids on other insurance providers. And while many school districts leaving MUST will have to pay a $480-exit fee per employee, Kalispell does not have that obligation. With premiums rising 39 percent on average across the state, Bob Robinson, MUST’s chief executive officer, acknowledged school districts are frustrated.
“This is a large increase across the trust and this is a large increase generally,” Robinson said. “We’re just seeing a significant increase in medical costs for our trust and we’re in a bit of a catch-up mode.”
But Robinson noted the premiums are a reflection of increasing medical provider costs, an estimate of medical claims to be filed, an attempt to build the trust’s reserves, as well as additional obligations by the state, like a bill passed by the 2009 Legislature requiring insurance providers cover treatment for autism.
In the case of Kalispell School District, MUST’s largest member, claims came in much higher than it paid in premiums for the current year.
“Right now, the trust is losing money on Kalispell,” Robinson said. “Even to break even for this year’s rates on Kalispell, we should have been 14 percent higher.”
“The trust and the small schools in the state cannot afford to subsidize Kalispell,” he added.
With other competing health insurance pools charging comparable rates, it’s unclear whether MUST’s increased premiums will prompt Kalispell to leave. Lisa Lykins, a library media specialist at Kalispell Middle School, is also the chairwoman of the district insurance committee, which began last week evaluating offers by other health insurance pools, and hopes to make a decision as early as this week.
Evaluating the different policies against one another, Lykins said, is difficult and time consuming.
“They’re all written in such a way that it’s really hard to compare apples to apples,” she added, and if at the end of the process Kalispell decides to stick with MUST, the insurance committee will try to offer plan options with higher deductibles or less coverage, so employees can keep some health coverage.
Like Glasser, Lykins is concerned about the employees on the low end of the district’s pay scale, but also retirees on fixed incomes. Lykins’ mother, who teaches in a rural district, now has a monthly health insurance premium equal to her house payment.
“As a retiree it’s cost-prohibitive,” she said.
The Kalispell Public Schools’ annual Benefits Fair is tentatively scheduled for May 12, but that could be delayed, particularly if the district drops MUST and goes to another provider, which would require every employee to newly enroll in a different policy.
Lykins said co-workers have been coming to her, wondering what will happen to their insurance costs this summer and asking, “What’s going on?” Her reply to them for now, she said, is: “We’re doing the best we can.”