Bill to create health insurance pools for teachers headed to Pawlenty

Legislation approved Thursday night would create a statewide health insurance pool for school employees and teachers, but some critics say it might create more red tape and question the program's savings.

In the southern Minnesota town of Blooming Prairie, a new teacher's contract last year included big changes to health benefits. The district is no longer part of an insurance pool, and instead puts money into Health Savings Accounts so teachers can buy their own insurance individually.

Ann Stephenson, a high school special education teacher and also the local union president, said it was worth trying. Family rates for her under the old plan cost about $800 a month - and that's after what she considers a generous contribution from the district.

But Stephenson said it's too early to tell if this new model will be better.

"It's been good in the sense that, financially, I think we're coming out ahead," Stephenson said. "But you're no longer part of a group and you're out there on your own, which is a little bit scary, too."

"I'm not sure a statewide system versus a system we have now really will either save or lose money."

What Stephenson would prefer is a way for all 200,000 or so school employees in Minnesota to join together to buy insurance. In theory, a statewide pool would have more bargaining power than if just one or a few smaller districts were buying. That bargaining power would then translate to lower premiums, which would mean both the district and employee would end up spending less money.

Such a pool would be created under the legislation approved Thursday night. It only needs the governor's signature to become law, but Pawlenty has vetoed similar proposals twice before.

One supporter is the state's teachers' union. Education Minnesota points to a recent state report that estimated districts would save $190 million in the first three years under such a pool.

But some critics question the accuracy of those numbers. Charlie Kyte lobbies for Minnesota's superintendents at the Capitol. He said one thing the report didn't account for was the need for a larger reserve fund to ensure there's enough money to pay out on claims during the first few years.

"I'm not sure a statewide system versus a system we have now really will either save or lose money," Kyte said.

Opponents also say a statewide pool would create more red tape and take away school boards' ability to make local decisions. They also point to Oregon, where some officials are questioning whether similar legislation there has amounted to any savings.

The Minnesota legislation comes amidst sparring between the governor and teachers union over the state's failure to win federal money under the Race to the Top program.

Pawlenty is tying the fate of the health care bill to the fate of other education changes he wants to see approved. Those include an alternative way for mid-career professionals to become teachers, along with changes to how teachers are evaluated.

"Before the teachers do things to enhance their own benefits, I think we should be doing things to address the needs of children and the students that will benefit them, like education reform," Pawlenty said. "So unless and until I see some education reform proposals, we won't be considering benefit enhancements for teachers."

Education Minnesota's president Tom Dooher said the governor should decide the fate of this bill separate from other bills, and Dooher stands by those estimates for big savings.

"I don't believe they need to be tied; I know the governor wants to tie them to reform - but this is reform," Dooher said. "This is saving $190 million for schools. This could be directly reinvested into our students of Minnesota."

Some of those other changes the governor has pushed for are still alive at the Capitol. Their fate is likely to be determined in coming days.