Monday, May 31, 2010

More to Consider about Two Tiered Health Care

Governor Markell has portrayed his plan to charge new employees much more for their health care as saving the health plan and as having no impact on current employees.

In regards to saving the health plan, no evidence has been given that this proposal is fixing a specific problem in the plan or filling a cash hole in the plan. This proposal does not seem to have a direct claims to premium need.

Regarding the impact of the proposal on current employees, casting new employees overboard will not save other employees from rate increases. In fact, this proposal could have the opposite effect.

In any insurance plan, "adverse selection" must be avoided. Adverse selection is when some policy around the plan has resulted in more ill people entering the plan than would occur in random selection.

Now consider the radical proposal of this administration moving from the present situation in which basic health care is given at no cost to an employee, to charging new employees as much as 20% of their salary for family coverage. If one is a para-professional new hire making $17,228 a year in salary what will he/she do? In the interest of keeping a roof over the family's head, and doing other things like eating, the para-professional will probably not elect to take the insurance.

In the above scenario the para-professional will not take the insurance unless...unless he/she or someone in the family is already chronically ill. The only way the new plan makes economic sense for low paid employees is if medical expenses from a pre-existing condition warrant this exorbitant type of family expenditure.

Over a period of time the scenario plays out hundreds, and thousands of times until the extreme cost sharing has created adverse selection in the health plan. Guess what happens then. Then, you and I, current health plan members who "will not be affected" are now going to be paying much more for our insurance to correct the resulting imbalance in the plan's expenses.

Solidarity is not only moral, it also makes economic sense.

Budget Mark Up to date

Here in brief is a run down of the two weeks of budget mark up just completed by the Joint Finance Committee. The following items have been voted by the JFC, although the JFC will meet again for more mark up in about two weeks. Also, no budgetary item is fixed until the passage of the budget bill on June 30th:
The five unpaid furlough days will be restored to educators and state workers.
The deficit in the State Employee Health Fund will be made up with General Funds.
Eligible educators will receive Step Increases.
Although no new NBC or Cluster stipends will be paid, those already receiving them will continue to do so.
Overtime compensation will be given based on 40 hours of paid time.
New unit growth will be funded in education.

Several big issues remain to be decided including the restoration of Short Term Disability insurance, funding for math and reading specialists, and various cost shifting to local school districts such as transportation cuts.

Monday, May 24, 2010

No Need for Rush to Change Health Care

The Joint Finance Committee continues on with budget mark up. They have not yet taken up education. DSEA believes that stipends for National Board Certification and Clusters should be restored, particularly in light of Race To The Top and the push for alternative compensation. Shouldn't we honor our existing alternative compensation promises before starting more programs of dubious funding potential? Also, we remain concerned about math and reading specialists. Although many of these teachers have been given other positions, some are among the approximately 380 teachers threatened with RIF around Delaware. Refunding these positions could alleviate some of the financial pressure on local school districts.

Also, JFC has not addressed the issue of Short Term Disability. I believe there is interest on the committee for restoration of the insurance to the former 20 day elimination period. Last year, the Short Term Disability elimination period was changed to 60 days. In other words, if a serious illness strikes, and educator or state employee must have the means (banked sick days?) to make it 60 days without any compensation, before the insurance is activated providing 75% of salary.
In other news today, the Governor communicated to our members via email about establishing a different tier of health care and pension for new hires. Dealing with the latter first, pension should not even be on the table for change. Our pension plan is well funded and well managed. There is no need for new hires to contribute more money.

Health care on the other hand remains a challenge for everyone. Federal legislators allowed themselves to be scared into doing half a job on health care reform, so health care inflation continues to cause problems for working people. However, the solution is not to sell out future generations of educators. Do you want to work next to someone who can't afford health care for their kids, because you didn't want to fight for them?

That's the scenario we will be facing. Consider, for example, the cheapest family plan under the proposed tier is $322.07 per month employee contribution. A new hire para-professional earns $17,228 per year. Obviously, this individual will not be insuring his/her family. Many educators and other state employees qualify for public assistance such as food stamps. I guess we will be able to add Medicaid to the list.

Keep in mind, that after budget mark up ends, we will only have 13 legislative days left. We are asking the Governor not to attempt to make sweeping changes to complex health and pension plans in a needless rush. There is no compelling reason why the summer and autumn can not be used for calling in stakeholder groups and working toward solutions in health care cost containment. To the degree that changes are needed, legislation can be filed in the next General Assembly.
Finally, if you are a resident of the Christina School District, do not forget that tomorrow is the referendum vote. Polls will be open from 10:00AM to 8:00PM. Christina District desperately needs this operating referendum and the odds are against them. Please make an extra effort to get to the polls.

Monday, May 17, 2010

JFC Votes to Restore Pay

The Joint Finance Committee is undertaking Budget Mark Up for the next two weeks while the rest of the legislature is on break.

Today the JFC voted 12 to 0 to restore the five unpaid furlough days to educators and other state employees. For educators this will mean the return of the 188 work days to statute.

Eligible teachers will also receive step increases according to this JFC decision.
Tiering of health and pension benefits is still threatening. Be sure and take advantage of this two week break to contact your state representative or senator at home with the message that it is reckless to attempt to make major health and pension policy within the 13 legislative days remaining in session.

All stakeholders need to be shown the need for such changes ( a hard case to make on pension considering Delaware's is one of the best funded and managed in the nation). All stakeholders need to be involved in a solution. Running legislation imposed by OMB in the final days of session that will impact educators and state employees for generations to come is not a good way of policy making.

Sunday, May 9, 2010

Busy Week Ahead

The week that begins Monday, May 10th will certainly be eventful. Here are a few things on my mind.

On Tuesday, May 11th, School Board races will be held across the state. This blog recommends: Eric Anderson for Christina; Martin Wilson and Catherine Thompson for Red Clay; Melodie Spotts for Colonial; Rodney Layfield for Indian River; Julie Johnson for Appoquinimink; and Chevis Anderson for Capital.

The Delaware Office of Management and Budget is floating an idea around Legislative Hall for another tier of health and pension benefits for newly hired educators and state workers. DSEA has opposed this idea since it was first mentioned in Governor Markell's State of the State Address.

First, the pension plan is both well funded and managed. Pension, even in these difficult times is not financially distressed. There is no reason for fixing what is not broken.

Second, DSEA has been a strong advocate for good management and transparency in all matters connected with the State Employees Benefit Committee. DSEA commissioned an actuarial report on the Plan which suggested a number of reforms and best practices. Consistent with the organization's prudent approach to everything connected with the Health Plan is our opposition to attempting to legislate change this year. After next week, the legislature is out for two weeks while the Joint Finance Committee works on the budget. Which would give the legislature about 12 working days to do major health care policy work affecting thousands of future educators and state workers and their families. This would be irresponsible.

Finally, this push for tiered benefits is in part a response to the Other Post Employment Benefits (OPEB). OPEB is the health care offered to educators and state employees who retiree before being eligible for Medicare. A few years ago states had to begin showing financial accounting for their future OPEB liability. Because health care in the US is so out of control and often has double digit inflation yearly, the OPEB liability for all states is enormous. For Delaware, the liability is currently projected at $5.6 billion. Delaware has established a trust for the liability and has been putting in millions. It's not enough, but it is more than most states have accomplished. Yet, in the end health care is going to take a federal fix. The US Congress needs to go back to work and complete the work started with the recent passage of insurance reforms. In the meantime, Delaware needs to stay the course and see how issues play out with more reform measures before pushing the destruct button on health care for retirees.

Speaking of the federal health insurance reform, the legislation included a provision encouraging employers to provide pre-Medicare health care to early retirees. The federal government could reimburse up to 80% of the cost of this health care under certain conditions. Delaware needs to take advantage of the federal reinsurance program.
A bill will soon be moving in the Delaware legislature to change teacher due process in termination language in the state code. The change will bring the statute in alignment with regulatory change that has already happened around Race To The Top.

The language change addresses the need for teachers with less than three years in the state or less than two years in a district to have two of three years with a "Satisfactory" rating in the Student Achievement component of the evaluation, before being given due process in termination. The slang for due process in teacher termination is called, "tenure"; although, as this blog has discussed before, the term is misleading.

Currently, Student Achievement is component five of the DPASII. It is possible now to be on an Individual Improvement Plan for component five, fail to show improvement, and not be given due process. So, in substance there is nothing alarming in the bill. However, the work between the Delaware Department of Education and the Delaware State Education Association to determine the definition of Student Achievement under RTTT will be important.

Budget Mark Up will begin the week of May 17th. Now that the restoration of the furlough days with pay is looking promising, DSEA is pushing for other needed money for our members. DSEA is very concerned about the elimination of the Math and Reading Specialists from the budget. There are 210 of those positions around the state, and we want all of our members to have a job in the Fall. DSEA advocates restoring Short Term Disability. DSEA would like to see our members made whole by restoring National Board Certification and Cluster stipends.

Sunday, May 2, 2010

Blog On the Run

Necessity is moving this blog from well thought out essays to quick updates. Things have really been rocking and rolling at DSEA. Our course we are in the heart of the legislative session and working on recovering lost ground from last year, but we also are dealing with School Improvement Grants, and Race To The Top, and school board races across the state.

On Friday, a training conference on RTTT for DSEA teacher leaders was held in Dover. DSEA was assisted by a consultant from Wellstone Action in presenting the training. We want our teacher leaders to be prepared to make RTTT a positive experience for students and educators.

On Saturday, the DSEA Education Support Professionals had a conference. In addition to skills training, they received a political update and were visited by Attorney General Beau Biden, and state representatives Earl Jaques and John Kowalko. John Kowalko is the DSEA Legislative Friend of Education for 2010. Biden spoke extensively about school bullying and efforts to curb this social ill. Jaques and Kowalko spoke about their work on the House Education Committee as well as efforts to protect educator compensation and benefits.

If you are a DSEA member read your mail and answer your phone this week as information about school board races will be coming to you.