Some continued positive news for the Public School Employee Insurance System was presented today to the joint Education Committee: Based on the first half of 2015, the beleaguered system seems to be on track to avoid a rate increase or a change in benefits for the 2016 plan year.
The Employee Benefits Division, which manages the system, won’t decide on 2016 rates until its July board meeting. But Bob Alexander, the EBD director, told the committee today that actuaries have said that the preliminary outlook is good for holding rates steady.
But. That doesn’t mean all is well, as many an Arkansas teacher will tell you, along with plenty of janitors, cafeteria workers, paraprofessionals, secretaries and others who work for school districts.
Premiums are still far, far higher than they are for most workers insured through their jobs, whether in the public sector or the private sector. The bad deal given to school employees this time last year, during the legislative special session to address this issue, remains just as bad as it was then. The fact remains that the average Arkansas teacher bears twice the percentage share of premium cost as the average American teacher, or the average American worker in any sector with employer-based insurance.
Nonetheless, the situation is looking much better on an actuarial basis. The stabilizing trend seen last December continues. Unfortunately, that probably means the chances of state policymakers engaging more closely with this perennially difficult issue is low, considering “engagement” here inevitably translates, at least in part, to “putting more money in the system.”
Alexander said the public school employee system currently has $56 million in net assets available, as compared to $9.5 million this time in 2014. He cautioned that that figured is “a little misleading” because people pay a disproportionate amount of their medical costs out-of-pocket throughout the first half of the year, as they spend up to the level of their deductible. (After employees meet their deductibles, of course, they’ll then begin drawing on the assets of the insurance pool for subsequent medical costs.)
The question now is whether membership numbers have stabilized. If employees continue to leave the plan as they have in the past, that will continue to erode the overall health of the existing insurance pool and make costs creep up once again. In other words, although things have stabilized in the short term, it’s unclear whether the underlying adverse selection issue has been resolved by the various changes made during last summer’s special session.
At the moment, there are 57,622 employees in the system, as compared to 58,603 this time last year. Alexander said that drop was too small to draw any conclusions, considering membership figures fluctuate naturally throughout the year. Part of the decrease, he said, might be from the legislature’s decision last summer to make part-time employees ineligible for participation in the public school employee plan.