NCPA - National Center for Policy Analysis


May 4, 2005

At least six states are considering health insurance pooling plans for school districts as a way of holding down increasing health care costs, says the Associated Press (AP).

Supporters of insurance pools "see it as a way for states to free up money for books and teachers' salaries in their school districts," which are "hurting for revenues and pressed" by health care costs, according to the AP.

Advocates also "say it makes little sense for school systems to negotiate health plans individually," the AP reports. According to Michigan Senate Appropriations Committee Chair Shirley Johnson (R), the goal of using pools is to "spend less on the cost of education and more on educating children."

  • Studies of health insurance pools have found that such plans could save Oregon's 198 districts and community colleges $50 million annually.
  • A Pennsylvania study found that the state could have saved $585 million in 2003 if a pool had been established.
  • Support is strong in Michigan, where Senate Republicans are pushing for a pool after several superintendents complained about rising health care costs.
  • Georgia, Kentucky and North Carolina require health care pools for schools, while Oklahoma, Tennessee, Utah and Wisconsin have optional plans, according to a 2004 study by Reden & Anders Ltd., a Minneapolis consulting firm.

In Oregon and Minnesota, teachers' unions support pooling, arguing it will help schools avoid budget cuts driven by soaring medical costs. But unions in Michigan and Ohio are opposed, saying a state-run monopoly would limit competition and hurt benefits.

House Republicans in Ohio predict savings of $650 million to schools over four years. That's a fraction of the state's $7 billion education budget, but still welcome as districts continue to ask voters for more money, proponents of the measure say.

Source: Andrew Welsh-Huggins, "Some States Push For Health Care Pooling," Associated Press, May 3, 2005.


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