Controling Health Benefit Costs

By Charles K. Trainor

Health insurance for employees and retirees is an expensive but important undertaking for school districts. In 2008, the U.S. spent more than $2.3 trillion on health care. The cost per capita is among the highest of industrialized nations -- $7,681. Costs are expected to rise 10 percent annually unless significant changes occur in the health care system as well as in insurance plans.

Although school boards struggle to control all expenses, health care costs present a particularly difficult challenge. Medical expenses are rising because of new technologies, an aging population, administrative costs, and the extensive diagnostic tests ordered to avoid malpractice lawsuits. These costs are passed along to school districts in the form of higher insurance premiums.

Health care cost containment is a hot button issue. Emotions over the issue were heightened by last year’s national debate concerning insurance coverage and the government’s role in the process. Most employees view district-provided health insurance as absolutely essential for the well-being and protection of themselves and their families. Unions fight vigorously to maintain negotiated medical benefits. As a result, administrators and boards are reluctant to suggest reductions to such highly valued benefits.

However, with high unemployment, resentment is growing among those who view school district employees’ benefits as excessive. Noticing taxpayer unrest, some districts are renewing efforts to reduce health insurance costs.

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