Home arrow COSA Blogs arrow Bennett's Blog: Hear the train acomin'?
Bennett's Blog: Hear the train acomin'? Print E-mail

chuck-bennettby Chuck Bennett, Director of Governmental Relations

Train songs -- from the ones that talk about lonely whistles on the prairie to show tunes about the Atchison, Topeka and Santa Fe -- are some of the most popular music in America.

They recall simpler times, open spaces, lost love, or just the feeling that if things aren't going right there's always a way out.

In politics (at least the brand practiced in Salem), trains, tracks and all the attendent metaphors are signals that a law is about to be passed and there isn't much that can be done about it as in, "That train has left the station," or, "I'm not standing on those tracks," and the ever popular, "I see the train acomin'."  And that's the way lobbyists and legislators are talking about SB 426.

SB 426 is the bill from the Oregon Education Association and its annex in the Governor's office (former OEA President Jim Sager and chief lobbyist Chip Terhune hold down the fort as top education advisor and chief of staff, respectively). It creates the Oregon Educators' Benefit Board and puts all other health insurance providers out of the school business.

The arguments for and against the proposal  have been rolling around the Capitol for nearly six years but this Session, with a successful election of majority Democrats in both the House and Senate and re-election of the Governor under their belt, OEA took one more turn through the roundhouse. In previous sessions the bill had been sidetracked by Republicans who have agreed with school district and Oregon School Board Association assessements that the plan will at best fail to deliver on promised savings, which have dwindled from $200 million to maybe $40 million this year. At worst, OSBA has developed statistics that indicate major insurance rate hikes are looming after the bill's passage.

There have been several attempts to slow the bill down long enough to determine which side is right -- will there or won't there be savings if the bill passes? To no avail. Sponsors and supporters have argued successfully that the idea of a school insurance pool has been studied to death (literally for three sessions the bill died in committee) and now's the time to see what really happens if it passes.


You read that right. Supporters or at least those who are planning to vote for the bill are being surprisingly honest -- "Okay," they say, "his might not work and it might even cost school districts a lot of money but how will we ever know if we don't try it?" That argument makes sense if you're talking about whether to buy dark or milk chocolate covered cherries but when you're throwing out 40 years of stable health plans used by tens of thousands of Oregonians even if they are publicly employed educators, it doesn't seem such a reasonable experiment.

Even more troubling is that the insurance carrier that writes the current OSBA Trust plan that covers about 85% of districts and is the only likley candidate to offer statewide covereage under the statewide insurance pool proposed by OEA and the Governor, is getting very concerned that this plan could become law.

Regence BlueCross BlueShield president Dr. J. Bart McMullan has taken it seriously enough that he wrote the committee that will vote on the bill tomorrow and expressed real concerns. Here's what the guy who'll probably be selling the state the insurance they will get if the bill passes has to say:

"SB 426 is not just about health insurance. It is also about serving the best interst of Oregon's children and the community at large. Given Oregon's struggle with school funding, we beleive that reducing administrative costs where possible is a worthy -- and necessary -- endeavor. It is critical that such efforts be supported with accurate facts and reasonable assumptions. Our primary concern with SB 426 is that the projected cost savings associated with it are unfounded and untested.

Remember, this is the president of the company that will probably get the book of business no matter what happens in the Legislature. In most cases, he would be what is called an informed and disinterested observor. In some circles it is refined to, "he owns both dogs in the fight."

Dr. McMullan goes on to say that, "in theory there are potential savings to be gained from pooling and economies of scale. Our disagreement with the projected savings in this case, stems from attempts to extrapolate the projected cost savings from other states with educational pooling mechanisms."

He goes on to criticize the bill's exemption for Portland and North Clackamas where some of the highest premiums are currently being paid. "It may interest the Subcommittee to know that one of our largest districts in the state, with one of the highest cost for benefits, currently operates an independent health insurance trust. These exclusions further erode the opportunity for cost savings."

So what can be done? COSA along with every other objective observor (including Dr. McMullan) have suggested that there be a current, objective, independent analysis of the proposal before passing the legislation. So far the legislature has refused to follow that course. Instead, the bill is being rushed through the legislative process before opposition to it can build. Plans now are to have a vote on it tomorrow morning in the full Ways & Means Committee and have it voted out of both chambers of the legislature next week. There will be no hearings regarding the policy issues in the House. It's only discussion will have been confined to the budget writing Ways & Means Committee subcommittee on Education and the Senate Education Committee.

This becomes critical for proponents as opposition is beginning to build among OEA members who are only now finding out  what the Tigard office has in store for them. Already teachers' unions in Beaverton and David Douglas have announced opposition to the plan. Community College educators are only now finding out that despite a promised exemption, they will be sucked into the plan when their current insurer, OSBA Trust, goes out of the statewide insurance business.

So, if you think you hear a whistle blowing, don't look far for the train producing it.

Comments (8)Add Comment
Insurance pooling
written by John Sebastian, February 22, 2007
We should stay as we are until we have an independent cost analysis of this program.

John Sebastian
Insurance pooling
written by Carl Swan, February 22, 2007
Dollars and cents aside for a moment, I have not heard many comments about the quality of service experienced by educators when local control of their health care experience has been taken away. I hope someone is talking about this. We work very hard in our district with all our employee groups on our health care experience, and have had great results. Quick, I'll give you one minute to come up with 5 initiatives that actually improved after being taken over at the state or federal level .....ok....how about just one.....go!
Director of Instructional Services
written by Tim Mobley, February 22, 2007
I can't believe that there is such a rush to do something, even if it is wrong. This required change will cost us additional money and with no improvment in service.

The change will also be an economic blow to OSBA. OSBA is a strong supporter of public education in Oregon. This is not good for Oregon education or OSBA.
Insurance Pool
written by Helena Chirinian, February 22, 2007
The cost analysis that was recently sent to us from COSA clearly shows that we would receive less coverage and pay more.... Why would we do this?????
Insurance Pool strategy
written by Craig Brewington, February 22, 2007
Look at the big picture......

Get the legislature to create one single pool, from the hodge-podge.

Get the OEBB to standardize the coverage, from the hodge-podge.

Year Two or Four...get the employers' contribution rate standardized, from the hodge-podge.

Nah. OEA wouldn't think of that, not for a minute.
Insurance Pool
written by Chuck Bennett, February 22, 2007
Thanks for the comments so far.

The cost analysis sent to you was from OSBA and points out one of the problems with the data developed in this debate -- all of it comes from a source, whether OEA or OSBA, which has an interest in the legislation.

That's why COSA and others strongly advocated an independent study of the administrative and plan cost impacts of the new program. Like you we were surprised that this was not included in the final proposal making its way to the floors of the Senate and House.

It's not and in a political environment, the only reason it's not is political.
State insurance pool
written by Rod Boettcher, School Board Di, February 23, 2007
Many of us have not seen the parameters that the estimates from the Governor's office and OSBA's are built upon. Each group must have the other's numbers in order to make the stark comparisons many of us saw at the Legislative Conference this past week. If OSBA's numbers are correct, the Governor's office would see the financial folly in its legislation and withdraw SB 426. But they must have calculations built on different parameters that give them assurances that their cost analysis shows a better deal from the legislation. Legislators deserve to see the side by side comparison of the costing factors each group has used to develop their bottom line figures. They could then at least make a decision on which plan would cost less. If that is all they were voting on, how simple could that be! But they are not. They are also voting on local control of part of the negotiated contract with public school personnel. And it is on a cost which is not the largest in the negotiated salary and benefits packages. Salary is the largest part of the package. When will the State come after school district's right to bargain the salary of their employees? Where will the local control be then? Maybe we school board directors will still get to decide when kids get to take recess or if high schoolers can eat lunch off-campus. The train I see coming is belching with the smoke produced by the burning of carefully crafted contracts, inflexible health plans and discarded CIM and CAM planning manuals.
Insurance Pool
written by Rick Mould, February 23, 2007
As educators we have had our feet held to the fire to provide instruction and curricula that is scientifically- based and proven effective. It is often times a hard standard by which to abide, and it is certainly inconvenient at times. But it has proven to be the "right stuff". It has repeatedly demonstrated it's benefits to student learning, even though it is a hard standard to maintain. The legislature needs to strongly consider abiding by the same standard. Test the insurance pool for delivering on its intended mission before diving into the deep end of the, well....pool. We educators deserve the same consideration.

Write comment

security code
Write the displayed characters

This page was last updated on Tuesday, March 06, 2007 .