Vermont Lawmakers Expected To Reassess Teacher Health Insurance Proposal

May 10, 2017

Vermont lawmakers returned to the statehouse Wednesday to try to wrap up the session. Among the issues they were expected to review is the governor’s last-minute proposal to change how teachers' health insurance plans should be negotiated.

School districts across Vermont are negotiating new insurance plans that will go into effect in 2018.  
Late in the legislative session, first-term Republican Governor Phil Scott offered a proposal to mandate health care negotiations be done directly with the state rather than with local districts.  The governor says taxpayers could save about $75 million without teachers seeing significant changes.  
Fiscal officers from the Scott administration pushed for the plan during a briefing this week. Tax Commissioner Kaj Samsom says it would allow new access to health care with significant savings for the teachers and taxpayers.   “The plans themselves cost quite a bit less. So there’s premium savings for the employees’ share.  Because these plans are so much less expensive going to 80-20 actually doesn’t cost the average teacher anymore out of their pocket.”

The administration has offered an assortment of savings numbers, saying overall savings could reach $75 million. School districts would get $48 to $50 million dollars back for health savings accounts and taxpayers would save about $26 million dollars.  During a briefing on the plan with reporters, administration officials struggled to explain how the numbers were determined.  Rebecca Kelley is the governor’s spokesperson.   “The up to $75 million in savings is a result of the change in the plan. The recommendation on the plan and the sort of cost estimating and the actuarial values that go into that are based on behavioral data.”

Again, Kaj Samsom:  “The $26 million dollar number is a combination of lower cost plans, just lower premiums, 80-20 split on premiums. So the $26 million in savings to the payer which would be the school districts or the state in this scenario.  Well no it’s the ed fund. There is a projection that the change in behavior, generic drugs, better utilization, smarter utilization, will result in VEHI writing checking to the tune of $26 million dollars less.”

The Vermont Education Health Initiative, or VEHI, has already reached agreement with seven school districts on new insurance contracts.  Public Assets Institute Senior Policy Analyst Jack Hoffman wrote on his blog Wednesday that Governor Scott is jumping into a process that’s been ongoing for over two years and hasn’t made the case why he can negotiate a better deal.  “Federal rules require that the teachers come up with a different plan. They’ve actually been working on this for a couple years. They’ve come up with a variety of plans.  And the plans that they came up with are actually designed to help save money. I don’t think we see any evidence that there’s a need to change what’s been working all along. And I don’t think the Governor’s really demonstrated why he can negotiate a better deal than the individual school boards.”

The proposal was defeated last week after the House speaker cast a tie-breaking vote.  The governor then warned he would veto the budget if it was not added to a pending education bill.