MEA News Release - August 13th, 2009

Evidence shows schools pay less for health insurance
New analysis breaks myths of health care debate

EAST LANSING, Mich., August 13, 2009 – A new report dramatically changes the debate on public employee health care with this single fact: Michigan schools spend less per employee than private companies for health insurance. And unlike the private sector, public school health care costs are going down.
“Wrong Diagnosis-Wrong Cure” dispels many of the common myths about public school employee health insurance currently being presented as truth in the cost-cutting debate.
“This report shows that Speaker Dillon’s health care proposal is based on misinformation and faulty data,” said MEA President Iris K. Salters. “The real numbers reported to the Michigan Department of Education clearly indicate that the root of financial problems for public schools is not rising health care costs, as Dillon would have you believe.”
Speaker Dillon’s proposal is based on bringing health care spending for public employees in line with what private employers pay, but this report shows that if that were to happen, Michigan taxpayers would end up paying much more.
The evidence—gathered from actual costs, not projections—is startling:
Over the last three years, Michigan’s public schools have experienced an actual reduction of almost $350 per employee per year in the cost of health benefits paid by school employers.
· In that same three year period, overall expenditures for health benefits provided by public school employers declined more than $36 million—while health care costs for private employers have increased more than 29 percent.
· Health insurance benefit costs for Michigan’s teachers are 20 percent below private sector costs.
· In 2008, only about 1 in 4 school support employees had access to any employer-paid medical insurance.
“Speaker Dillon’s plan is flawed from the onset because it relies on projected numbers, rather than actual costs,” said the report’s author, financial analyst Arch Lewis, “In fact, the study shows that the Dillon analysis is based on projected public school health benefit costs that are $365 million to $645 million above the actual 2007-08 costs for school employee health benefits.”
“Wrong Diagnosis-Wrong Cure” uses actual costs from school district reports to the MDE to “shatter misguided illusions and present clear and comprehensive facts,” said Lewis.
“Michigan taxpayers cannot afford to gamble on a proposal built on faulty analysis and misinformation. This report shows why it could end up costing us all millions more,” said Salters.
To see the complete report, “Wrong Diagnosis-Wrong Cure,” go to www.mea.org.