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Insurance increases shock schools Teachers, districts face severe hikes By DAMIAN MANN With insurance rates skyrocketing as much as 70 percent this fall, many Jackson County teachers could pay $200 to $400 a month to maintain current coverage. School districts throughout the county were stunned this week after OEA Choice Trust announced it will raise rates well beyond earlier estimates of 30 to 40 percent. OEA is a subsidiary of the state's largest employee union, the Oregon Education Association. Some districts will be forced to absorb the costs. Eagle Point, which earlier this year cut 75 positions to balance its budget, estimates it will have to make even deeper cuts in staffing levels through attrition to pay for the $200,000 to $300,000 in higher insurance rates. Other districts - such as Ashland and Rogue River - have negotiated caps limiting what they will pay for insurance, leaving the remainder to be picked up by teachers. "I was so surprised that they could do such an increase so fast," said Ashland schools Superintendent Juli Di Chiro. "We were absolutely taken aback by the new rates." Since Ashland has a $474 cap on insurance, the financial burden of the increase would fall on the teachers, said Di Chiro. She couldn't reveal the amount of the increase until she has a chance to meet with teacher representatives over the 70 percent increase in rates. "It's a significant impact on our employees and I'm so concerned about it," she said. Although the financial burden doesn't affect the district's budget, Di Chiro said she has instructed her staff to make an all-out effort to find a cheaper insurance plan. Eagle Point finance director Greg Lecuyer said OEA earlier had warned that rates could go up as much as 40 percent and he budgeted accordingly. But the reality has been worse. One of the district's plans surged from $359 to $613 a month - about 71 percent. Another jumped from $483 to $747 per employee - a 55 percent increase. OEA Director Steve McNannay said he has seen insurance rates in other areas of Oregon that are as high or higher than Jackson County's. "This is a very similar situation to what we're seeing throughout the nation," he said. "I don't think this is atypical." Although some districts have opted for or are looking at other insurance carriers, McNannay said he couldn't comment on whether other plans were cheaper. "I don't know if we're comparing apples to apples," he said. "We think we have some plans that are competitive." OEA has not lost a significant number of clients because of the rate hikes and is actually gaining in some areas where its plans are cheaper, he said. "We have other districts looking at us and saying Blue Cross is astronomical," he said. The high rates for some districts don't mean OEA is abandoning teachers, said McNannay. "We are on their side and we will make every effort to provide them with the most cost-effective plan." He pointed out that for the period 1997-99, OEA didn't have any rate increases in Oregon. OEA is changing its underwriter as of Oct. 1 from Pacific Life and Annuity to ODS (Oregon Dental Service) Health Plans. McNannay said, "This is an Oregon company that will be a stronger advocate for teachers." Rogue River schools Superintendent Charles Hellman said teachers in his district, which has a $460 cap, will have out-of-pocket expenses in the coming year. If the district maintains the current coverage with OEA, teachers would have to come up with anywhere from $238 to $386 a month, depending on the kind of coverage. Prospect schools Superintendent Don Alexander said the OEA rate increase for his district actually declined from earlier estimates. "They originally told us it would be 38 percent, but now it's 28 percent," he said. But that still means the cost for each teacher's insurance will jump from $656 to $820 a month this fall and will be fully paid by the district, said Alexander. Phoenix-Talent schools Business Manager Doug Spani said the district and teachers chose Regence Blue Cross/Blue Shield earlier this summer because it offered cheaper rates than OEA. His district has a cap of $565, and teachers will have to pay $15 or $40 out of pocket next school year depending on which plan they choose from Regence. "The rate increases are not as sharp," said Spani. If the district had remained with OEA, the out-of-pocket expenses would have been $133 to $280 a month. Medford schools Superintendent Steve Wisely said the district earlier considered OEA Choice Trust, but opted for a different plan that was $1 million cheaper. OEA managed care would have cost $733 a month for each teacher, a 34 percent increase over the previous plan, he said. A traditional plan under OEA would have cost $859, a 39 percent increase. Associated Administrators Inc. (AAI), part of Regence Blue Cross/Blue Shield, came in cheaper at $685 for managed care and $694 for traditional. This plan still cost $1.8 million more that the HMO that pulled out of Southern Oregon last year. Reach reporter Damian Mann at 776-4476, or e-mail [email protected] Mail Tribune Home | Ottaway Newspapers, Inc. | Dow Jones & Co., Inc. | Privacy | Contact Us Copyright � 2001 Mail Tribune, Inc.