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Unions, school boards extend their health care contract — and promise to tackle reform

Hospital Bed
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Collectively, Vermont schools are set to spend about $340 million on health care this year .

Instead of fighting over how to divvy up the skyrocketing cost of health care, school boards and the state’s teachers union say they want to tackle health care reform instead.

The 10-member panel that negotiates a statewide teachers' contract for health care was expected to begin bargaining next month. But it instead announced on Tuesday that it would extend the existing agreement, which expires at the end of 2025, for another two years. Members of the Commission for Public School Employee Health Benefits say they want to take that time to explore plan offerings and a wide-ranging reform agenda to reduce the cost of health care.

The commission’s promise to take on health care affordability comes at a pivotal moment for Vermont’s education system. Proposed school spending grew by an unprecedented $230 million this year, and on Town Meeting Day, nearly one in three school budgets were shot down at the ballot box. A key driver behind ballooning school budgets were health care premiums that grew by an average of 16%.

“At this moment, how we share medical payments is less important than getting a firm handle on overall costs,” commission Co-Chair Mark Koenig, a member of the Addison Northwest School District board, said in a statement. “Let’s be clear; we are not kicking the can down the road. We’re picking it up and putting it in its proper place.”

Collectively, schools are set to spend about $340 million on health care this year, according to the Vermont Education Health Initiative, the nonprofit that manages school health care plans. Most school employees pay 20% of the premium share according to the current contract, the terms of which will now carry through 2027. The extended agreement covers nearly all school employees, including those belonging to Vermont-NEA and AFSCME.

Commissioners say they’ll explore changes to the plans that VEHI offers in a bid to reduce costs, including potentially cutting the number of available plans. But they also say they’ll advocate for much more ambitious reforms.

The commission is not a regulatory body. It cannot tell health care providers or insurance companies to charge less. And many of the reforms commissioners say they would like to explore — including reference-based pricing and prescription drug pricing reform — would require legislative action.

But commission Co-Chair Mike Campbell, a social studies teacher in St. Albans, said he believes that unions and school boards together have an opportunity to create change. Because for the first time, they’ll be working together, instead of fighting each other about how to pay a bill neither side can afford.

“That's amazing, to be honest with you. That's game changing,” he said.

Like salaries, health care was previously bargained at the local level, but a statewide contract has governed how schools and their employees split the cost of health insurance since 2021. The last two rounds of contract negotiations were drawn out and publicly acrimonious — both contracts were ultimately settled in arbitration.

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Lola is Vermont Public's education and youth reporter, covering schools, child care, the child protection system and anything that matters to kids and families. She's previously reported in Vermont, New Hampshire, Florida (where she grew up) and Canada (where she went to college).
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