Facing skepticism from Democratic lawmakers over his controversial plan for teacher health care benefits, Gov . Phil Scott is trying to convince the Legislature — and the public — that the estimated $26 million in savings projections are realistic.
Scott is calling for a statewide contract for teacher health benefits. He says the plan would allow the state to restructure teacher health plans in a way that saves $26 million a year, without increasing total out-of-pocket financial exposure for the educators that receive the insurance policies. On Monday morning, the Scott administration held a briefing for reporters to explain how the plan would work.
Commissioner of Taxes Kaj Samsom says that while total out-of-pocket costs won’t go up for teachers, they would take on higher deductibles in exchange for lower premium contributions. Samsom says those higher deductibles will influence consumer behavior in ways that lower overall health care costs for teachers.
Samsom used the example of someone getting a “booboo on their finger” to illustrate his point.
“When you do have some ownership on health care costs, or some participation, you may figure out you’re OK and do it at urgent care instead of the emergency room, or find a way to get to your primary care physician,” Samsom says.
Samsom says the administration didn’t come up with the savings projection itself. Actuaries at the Vermont Education Health Initiative — that’s the organization that oversees the teacher health insurance pool — came up with the total cost projections for the proposed teacher health plans. Regulators at the Department of Financial Regulation have vetted the rate proposal.
"The change is very much about behavior change, and how you utilize your benefit, and how you interact with the health care system." — Tax Commissioner Kaj Samsom
Phil Keller, director of insurance regulation for Department of Financial Regulation, helped oversee that rate review. Keller says he can’t “guarantee” $26 million in savings, but he says “the cost savings are real, and they’re substantial.”
“I don’t think we can say what the exact number will be,” Keller says.
The savings are predicated on teachers accessing fewer dollars’ worth of health care services, by giving them a personal financial stake in avoiding health care costs. Samsom and Keller, however, insist that the lower overall expenditures don’t mean teachers will be getting less health care.
“The change is very much about behavior change, and how you utilize your benefit, and how you interact with the health care system,” Samsom says.
If a mother or father is on the hook for the first $400 in health care expenses, Samsom says, they might opt for lesser-cost choices. And Keller says lower cost doesn’t necessarily translate into poorer care.
“And when you have ownership, some ownership of your health expenses, you may very well seek out a generic drug rather than a more expensive drug,” Keller says.
Martha Allen, president of the Vermont-NEA, says the whole premise is insulting.
“So that’s the skin-in-the-game concept, and I really take offense to that, because I don’t believe that our members are taking advantage of the health care system,” Allen says.
"[Teachers] are going to avoid getting preventative health care, or not go when they should." — Vermont-NEA President Martha Allen
Allen says she thinks the impacts of the proposal would be more severe than the Scott administration is portraying them.
“[Teachers] are going to avoid getting preventative health care, or not go when they should,” Allen says. “If you put off health care, you will end up with more serious illness and more expensive care needed down the road.”
Samsom says that might be a legitimate concern if the proposal involved “high-deductible health plans with no contribution to out of pocket with low-wage people.”
“But in a situation where you have essentially middle-class or upper-middle-class wages for teachers and other populations in this group, where there is the ability to afford $400 to $500 of out-of-pocket costs, I don’t think there’s a big fear people won’t get the health care they need or they deserve,” Samsom says.
Allen says Samsom misunderstands the household finances of approximately 40,000 individuals covered by teacher health plans. Allen says plenty of teachers are struggling to make ends meet. And she says low-wage support staff, also covered by the plans, are working “paycheck to paycheck.”
Allen says the most problematic element of Scott’s plan is the use of a statewide contract to negotiate the health care plans.
“Collective bargaining is all about negotiating with your employer, and that’s why keeping it at the local level is important to us,” Allen says.
Robbing teachers of the ability to negotiate total compensation packages with the districts they work for, Allen says, would erode one the pillars of collective bargaining, and undermine labor rights more generally.
Scott and Samsom, however, say that a statewide contract is the only way to ensure that their cost-curbing insurance proposal will be administered across the board. They point to some of the seven local school districts that have already negotiated health care contracts with their teachers. In one of those districts, according to Samsom, the district is covering 100 percent of out-of-pocket costs.
“We’re very, very worried, as are the school boards, about this savings evaporating, if not costs going up relative to where they were, if no intervention at the state level happens,” Samsom says.
The issue of teacher health contracts has become the main sticking point in late-session negotiations between Scott and the Democratically controlled Legislature. House Speaker Mitzi Johnson and Senate President Pro Tem Tim Ashe criticized Scott for waiting until the last weeks of the legislative session to propose his teacher health overhaul. They say the plan infringes on the collective bargaining rights of teachers. And they say there isn’t enough time this year to vet the impact of his proposal.
The House and Senate have put forward a counter proposal that leaves health contract negotiations at the local level, but captures any health care-related savings and uses them to lower property taxes.
Scott has rejected that proposal. And the impasse has extended the legislative session for at least one week, while lawmakers ponder how to proceed.
