Law simplifies school insurance

BAR HARBOR — A bill passed by the Maine Legislature in the session that ended Saturday will allow all nine schools in the Mount Desert Island Regional School System (MDIRSS) to pay the same rate for employee health insurance.

Currently, annual changes in Anthem Blue Cross & Blue Shield’s insurance premiums for the larger schools in the district are based on each school’s individual claims experience. Schools with fewer employees all pay the same rate.

The bill passed by the Legislature applies to the MDIRSS and to the handful of other “alternative organizational structure” (AOS) districts in the state. In an AOS, each school is largely independent, with its own governing board and annual budget.

The new law allows an AOS to contract for the same health coverage – and at the same price – for all employees in all of its schools.

The law was prompted by a provision of the federal Affordable Care Act (ACA) that will prohibit school units with fewer than 50 employees from continuing to buy insurance coverage through their current providers after July 2017.

Rep. Brian Hubbell (D-Bar Harbor), a former chairman of the MDIRSS board, introduced the bill to allow employees in an AOS to be counted as a single group for insurance purposes.

MDIRSS Superintendent Howard Colter said Tuesday that he sees that as a positive.

“I believe there’s more of an advantage to pooling together for the long run than staying the way they are right now, which is separate and different increase rates,” he said.

The smallest schools in the MDIRSS – those in Tremont, Trenton, Cranberry Isles, Frenchboro and Swans Island – currently pay Blue Cross’s “community rate,” which, in the past, has sometimes had lower annual cost increases than those experienced by the larger schools.

Colter said that when the smaller schools’ insurance rates are based on the combined claims experience of all of the MDIRSS schools, they might initially see an increase.

“But the advantage is that they will be part of a larger group, and in the long run, that should pay off well for them,” he said. “I think that over time this will prove to be an advantage.”

After being approved by wide margins in both the House and Senate, Gov. Paul LePage vetoed the AOS insurance bill. But the House overrode the veto on a 134-13 vote, and the Senate voted 30-3 to override.

The governor said in his veto message that while he supports the idea of using economies of scale to lower the cost of providing health insurance for public employees, Rep. Hubbell’s bill did not go far enough.

“This bill does not provide an AOS with the option to join the state’s benefit plan; instead it focuses on a narrow solution to a broad problem,” the governor wrote.

He noted that Hubbell, in testifying in support of his bill, described the insurance challenge facing the AOSs as an “unintended consequence” of the ACA.

“This is being far too kind,” the governor wrote. “The ACA was a sham, sold to the American people upon the premise that government mandates could lower the cost of insurance for hard-working men and women in this country while destroying the ability of the private sector to compete.

“In reality,” the governor said, “the ACA continues to threaten the ability of the state of Maine … to provide quality affordable benefits to state employees.”

LePage said he wants the state to look for opportunities to reduce health insurance costs “across all public sector institutions” by pooling their resources to achieve economies of scale.

“I am not content to nibble around the edges of our ballooning public costs,” the governor wrote.

Dick Broom

Dick Broom

Reporter at Mount Desert Islander
Dick Broom covers the towns of Mount Desert and Southwest Harbor, Mount Desert Island High School and the school system board and superintendent's office. He enjoys hiking with his golden retriever and finding new places for her to swim. [email protected]

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