February 9, 2007 Issue (95k ) of Legislative Highlights

Senate Bill 426 Update: The bill calling for a state-run mandatory insurance pool for school employees, which OSBA strongly opposes, is currently in the Ways and Means Committee. 

Proponents of the bill assert that it contains a "hold harmless" provision that would ensure school districts would not pay more for health insurance plans as a result of the state-run pool. In fact, this notion is an illusion - there is simply no such protection in SB 426. 

Here are the facts:

SB 426 does not protect school districts, ESDs and community colleges against health insurance cost increases.

SB 426 does not guarantee cost savings or even cost controls.

• The bill's so-called "hold harmless" provision - Section 17 - does not guarantee that there will be no benefit plan premium increases for educators.
• SB 426 does not meet the goal to reduce costs, it just duplicates coverage.
• SB 426 provides no mechanism for a guaranteed cost savings.
• Districts, colleges and their employees can already choose benefit plans that are both more expensive and less expensive than their current coverage. SB 426 merely reflects the current situation - it does not improve the situation, just takes choices away from locally elected officials and their local unions.
• SB 426 does not address the real health care cost drivers: an aging employee population, prescription drug costs, high-tech procedures, and the high cost of insuring retirees.

SB 426 requires the proposed Oregon Educators Benefit Board (OEBB) to offer comparable plans only when first provided. 

•  SB 426 contains no obligation to provide continual and ongoing benefit plans that are less costly.
• SB 426 does not define "comparable plan," nor does it specify coverage levels for deductibles, co-pays or co-insurance for comparable plans. 
• SB 426 contains no provision that requires the OEBB to set premiums at a less costly level for an individual district - premiums will be dictated by the claims experience of districts already in the pool.
• If a district already has a plan at a lower cost, the district should not be forced to join OEBB.

SB 426 robs locally elected school boards of their authority to choose the most cost-effective insurance provider and plan for their districts. 

This move could cost Oregon school districts, ESDs and community colleges $99 million in the first year alone. 

To find out more, contact Tricia Yates , director of Legislative and Public Affairs, Oregon School Boards Association, 503-588-2800 or 800-578-6722.

OSBA has a financial-impact calculator that compares each district's estimated costs in the OSBA Trust and the proposed pool.

ACTION ALERT:
OSBA urges all members to call their Senators and Representatives to inform them of SB 426's impacts on their districts; legislators may be reached by calling the Capitol Switchboard, 800-332-2313.