Education Chair, School Administrators Chief Discuss Insurance Crisis

The chairman of the House Education Committee and the head of the state’s school administrators say that ongoing discussions are winnowing choices for how to handle a crisis in the state’s public school employee health insurance program.

The health plan, which is $58 million in the red and has school employees facing nearly a 50% increase in premiums, has been the subject this week of non-stop capitol meetings and a potential special session.

Rep. James McLean (D-Batesville), chairman of the House Education Committee, and Dr. Richard Abernathy, executive director of the Arkansas Association of School Administrators (AAEA), appeared on KARK’s Capitol View to discuss the crisis.

McLean said the issue may become an “adequacy” issue for the state, requiring a greater exertion of state influence over the troubled program.

“When you have a benefit that is eating up so much take-home pay of our teachers, I feel like it will become an adequacy issue,” McLean said.

The landmark Lake View lawsuit, settled last decade, required more state control and investment in public education as the Arkansas Supreme Court and General Assembly redefined what an “adequate and equitable” education in Arkansas should be.

McLean said a one-time state infusion of $50-58 million would not surprise him and he cautioned that public school employees would have to see some premium increases as part of a solution.

Abernathy, a former Bryant superintendent, said he’s uncertain if the state should have a greater say over a line-item of public school employee health insurance spending. The state has a lot of control over local school budgets now, he asserted.

“I’m not sure how much local control we have over the budgets, just to be real honest, because so much is tied up in salaries now. If you transport kids, that’s a set amount. When I was a superintendent of schools, you basically had about 80% of your budget that was tied up. So you have 20% that you can decide if you want maintenance, facilities or other issues that you can deal with. So, I don’t know how much more the state wants to take control of budgets,” Abernathy said.

In recent days, discussion among policy makers has suggested that the Affordable Care Act may provide an outlet for coverage for some employees in the plan.

Both panelists said they were unsure if the ACA would be a viable solution, in part because it could lower participation in the teacher insurance plan. Low participation is one of the contributing factors to the health plan’s financial woes.

“That is a whole other dimension to what is a very big problem. I’m not really prepared to enter into an ACA solution to this problem right now,” said McLean.

He did say he sees no alternative other than a special session to fix the problems of the program, and McLean and Abernathy see a three-prong approach of one-time state money, a repurposing of state and local education funding, and modification to the insurance plans as solutions.

“I believe by the end of next week, we should have something, the framework of a solution in place that all of the educational stakeholders – legislators, educational leaders, teachers, public school employees – can have input on and hopefully there can be a consensus developed, or developing, that we can take to a special session,” said McLean.

You can watch the two-part interview in the video clip below.