Panel supports school insurance pool

By Matthew Stolle

ST. PAUL -- A plan to create a statewide health insurance pool for school district employees that would give them more purchasing power in the marketplace passed through a state Senate committee on Wednesday.

But the bill was the subject of intense criticism from a long line of opponents, including representatives of the Minnesota School Boards Association, Minnesota Chamber of Commerce and an assortment of health groups. Many complained about the bill's lack of specificity and its intention to strip away local control from districts. In a sign of the committee's skepticism, it advanced without its recommendation.

The escalating costs of health insurance have been a dominant concern among legislators this session. The issue took on local resonance recently when Rochester teachers agreed to a two-year contract that preserves their health benefits in exchange for offering only minimal cost-of-living adjustments.


Dallas Glaser, president of the Rochester Education Association teachers union, has been a vocal proponent of a pool plan for school employees.

The bill seeks to collect the state's estimated 200,000 school employees into a single purchasing pool. It also calls for the creation of a 14-member board, half of which would be appointed by school employee unions and the other half by the Minnesota School Boards Association. The board would have broad discretion over the design of the pool to "provide the optimal combination of coverage, cost, choice and stability."

"By doing so, there is significant savings," said Sen. LeRoy Stumpf, a DFLer from Thief River Falls, who estimated $223 million in savings over six years.

But opponents attacked the plan for a range of perceived faults, including the belief that a statewide health plan would automatically yield savings.

"Bigger is not always better," said Grace Schwab, a lobbyist for the Minnesota School Boards Association. Schwab cited the experience of a 1.4 million purchasing pool in California that decided it couldn't "contain the rate of costs, and they're splitting back down to regional entities."

The lack of specifics in the plan was troubling to Sen. Sheila Kiscaden, who offered an amendment requiring the plan's architects to develop it more fully before returning to the Legislature for approval.

"There are so many holes in what they are providing. Their bill is unbelievably vague," said Kiscaden, an Independent from Rochester who sits on the committee.

Critics also called the plan risky. They said the reserve fund outlined in the plan as a safety net in the event of an unusually high number of claims was inadequate. They suggested that any shortfall, if it materialized, would have to be made up by taxpayers in the form of higher taxes.


But Lee Johansen, a staff member for Education Minnesota, the statewide teachers union, argued that the status quo was unacceptable.

"If we do nothing, premiums will go up faster," Johansen said.

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