Ballooning health insurance costs in District 91 were announced to school employees and the public alike recently, though administrators said they are unclear exactly how an expected 20 percent spike in premiums might impact next year’s budget.
Board members were presented with the news at their May 8 meeting that a 24 percent overall increase in health insurance premiums would take hold on July 1, however, continued negotiations between the district’s broker and Blue Cross Blue Shield of Illinois have slightly reduced that figure. Under the newest agreement premiums will climb anywhere from 18 percent to 24 percent, depending on the type of coverage.
According to an April 23 letter from Blue Cross Blue Shield to the district’s broker, the primary reason for the steep increase is the district’s expanding claims history. Fifteen recently filed claims for a total of $891, 440 saw the insurance company pay more in benefits than it received in premiums.
“It seems to me that when you’re a company the size of Blue Cross Blue Shield, you can spread that cost around,” Brent Clark, executive director of the Illinois Association of School Administrators said.
Statewide, health insurance has become a growing expense for schools, much to the dismay of administrators throughout Illinois, according to Clark. Clark spoke critically of large insurance companies that pass along substantial cost increases, especially to smaller districts such as Forest Park’s.
Taxpayers fund roughly two-thirds of the local school district’s premiums. At the current rate that amounts to roughly $670,000 a year, according to Business Manager Ed Brophy.
Approximately 40 employees do not contribute to the cost of their health insurance. That category includes building principals and other ranking administrators – regardless of the coverage they’ve selected. Other employees who opt for the least expensive HMO coverage also do not contribute to the cost of their premiums.
For all other employees the district contributes a value equal to that of the least expensive HMO plan, currently pegged at $363 per month. There are approximately 129 employees who are insured through District 91, according to Brophy.
The rising cost of health care is particularly problematic, according to Clark, because revenues do not typically increase at the same dramatic rate that premiums have increased in the last five years. Very quickly those types of discrepancies will throw a budget “out of line,” said Clark.
Most recently, the K-8 district in Forest Park saw a year over year increase of 14 percent, according to Brophy. Board President Glenn Garlisch said he can recall a recent spike of 16 percent. Several District 91 board members were visibly jarred by the prospect of an even steeper increase and immediately began asking about proactive steps that can be taken to rein in costs.
“I don’t believe it would impact anything else we’re trying to accomplish,” Garlisch said of the increase in premiums. “We’re in a pretty solid financial situation.”
Preventative care will likely be stressed to employees next year and administrators will begin looking into the possibility of joining a cooperative with other districts. At minimum, however, it would be two years before the district’s provider will recognize the co-op and offer any savings.
“Twenty-four months will go quick,” Brophy said. “It’s worth pursuing.”