Bozeman School Board Faces Tough Choices with $62,000 Increase in Health Premiums

by jhwygirl

Let me first say that this story can (and will) be applicable to any town, any place, any time in the future. It just happens to be being reported in Bozeman right now.

Bozeman School Board has about 500 employees, and is self-insured. The $62,000 increase in premiums is a back-up policy that they have to cover any employee that goes over $150,000 in claims in any given year.

That $62,000 increase is going to translate into some risk exposure for the School Board (increasing its threshold for the back-up policy to $175,00) and increase premium costs to its employees. From the Bozeman Daily Chronicle:

For employees choosing the medium plan and family coverage, their monthly share would increase from $175 to $211, while the school district pays $689 a month. For single employees choosing the least expensive, basic plan, their monthly cost would go from zero to $14, while the school district covers $420 a month.

That’s a 20% increase in cost to families, and I don’t even know what % increase something is when it goes from zero to something, for one year.

Now – if it were city council sitting around deciding to raise your taxes by $36 bucks a year, for, say, a “Everyone Loves Bozeman” media campaign, how do you think the residents of the City of Bozeman would respond?

Yet, PhRMA spent $6 million bucks lobbying against reform in the months of April, May and June of this year. They spent $6 million bucks lobbying senators and spending money on a media campaign geared towards telling us why we don’t need health care reform.

Pfizer spent $5.5 million. Amgen, Eli Lilly and GlaxoSmithKline spent about $3 million each.

That all evens out to about $3 million a week.

Sweet! Here’s a government, having to provide health care to its employees. For now, they’re willing to pass the cost to the employees and increase their own exposure risk. How long before the next increase in cost? How long before that cost is passed on to taxpayers?

How long before it’s city employees? City police? County? State?

Because it’s coming folks. Not one of you out there can say costs are going down. Not without reform – and current proposals that were recently reviewed by the Congressional Budget Office were seriously lacking in any significant cost-savings. In other words, what the industry has so far lobbied for – and what they’ve successfully been able to avoid – is real cost-saving reform.

In more irony – who is the back-up insurer for Bozeman’s policy? Blue Cross/Blue Shield.

Why is that significant? Because Montana doesn’t have many choices…and lack of choices translates into higher costs because of the lack of competition. In fact, when one raises its costs, you can damned well bet the others are going to so also, proportionate to whatever it was that the other raised it by.

Business Week had an article about what competition means in the health care industry. Montana doesn’t rate very well – Blue Cross/Blue Shield has 75% market share

How much has Blue Cross/Blue Shield spent so far this year on lobbying? $5 million buckaroos.

So Bozeman School District employees are going to be paying $20 more out-of-pocket this coming year – and the school district itself is going to increase its risk by $25,000 for each employee – all because Blue Cross/Blue Shield had to spend $5 million bucks convincing Congress that it didn’t need to be reformed.

All because Blue Cross/Blue Shield had to spend $5 million for a media campaign telling everyone in Washington that would listen how great they are – its own “Everyone Loves Blue Cross/Blue Shield” campaign.

That is the free market. That is how it is operating. The health care industry can’t help itself – it is conglomeration of corporations. Corporations exists for one sole purpose. They will do whatever the law allows it to do as it seeks maximum profits.

It’s what corporations do.

It will not self-regulate. The only self-preservation that it knows is to stop reform. As I mentioned above, recent assessments by the Congressional Budge Office shows that whatever concessions they’ve given have been ineffective.

How can anyone say that is OK and that the U.S. doesn’t need heath care reform?

Have you written Sen. Tester, Sen. Baucus or Representative Rehberg lately? Let them know what you are thinking.

You know you need to – because the mere fact that I’ve provided that link means that Big Swede and all his friends are going to use it to diss on health care reform.

  1. Steve W

    The solution isn’t reform, the solution is abolition.

    Would you consider calling for reform of the plantation system? Say, perhaps, that as long as slave holders guaranteed a minimum of x amount of calories to all slaves based on height and weight, that then the system could continue because there would be some humanitarian controls placed upon it?

    Or were we right to finally and completely abolish slavery as the abomination it is?

    Currently there are 18,000 needless American deaths every year, men women and children who die of treatable diseases and only die because they lack access to medical treatment.

    The Private Insurance Industry relies upon those deaths to coerce and extort the rest of us to buy their “product.”

    The private health insurance racket is an on-going criminal conspiracy designed to funnel huge amounts of money into the pocket of a few. They maintain their criminal empire through extortion and bribery.

    Our leaders, in both parties, except that blood money and do the bidding of the criminals!


  2. JC

    Who was it that said:?

    “if somebody told you that there is a plan out there that is guaranteed to double your health care costs over the next 10 years, that’s guaranteed to result in more Americans losing their health care, and that is by far the biggest contributor to our federal deficit, I think most people would be opposed to that.

    Well, that’s status quo. That’s what we have right now.”

    Oh, ya. It was our president.

    Speak up naysayers and supporters of the status quo. What is your plan?

    • Please excuse my curiosity, JC, but I have to wonder why you are looking for “naysayers and supporters of the status quo” here.

      • JC

        I’m not looking for them. I just know that when people come here to criticize health care reform, particularly of the form that democrats are moving through Congress, that they offer no ideas of their own.

        So if they are unhappy with raised public expenses for health care, as identified by jhwygirl in this diary, and as Obama stated that the status quo will result in doubled costs in the next 10 years, well then they either have to support current reform efforts, or they have to offer some new ideas.

        The Big Swedes of the world love to come here and just be a naysayer about health care reform. I’d just like for once for him, or the others who may come by, to offer some ideas with their criticisms.

  3. goof houlihan

    A reasonable increase considering the exposure of the school district and the aging of those being covered. I don’t see the tragedy of employed people contributing to the cost of their health insurance, particularly if they like their health insurance coverage, which they do.

    • JC

      Just to be clear: you support employers gradually shifting insurance costs from the employer to the employee, as costs raise? At what point do you see the employee payroll deduction as being significant?

      Basically, what you are advocating is that employees take a cut in wages in order to backfill insurance company profits.

      • goof houlihan

        I don’t think “profit” is a dirty word.

        And I know bullshit is coming anytime someone seeks to restate what I said to erect a straw man.

        Yes, I think employees share the costs of collectively covering each other’s health care, “just to be clear”. There’s no doubt that $211, and $$689 is “significant”. Health care is expensive, has always been expensive. Covering tranquilizers and statins for everyone makes it moreso. In the case of SD7, you don’t get to blame evil capitalist profit making employers who increase their profits at the expense of the oppressed worker.

        But SD7 is “self insured” and they aren’t “making a profit”. So your woebegone “profit” blaming fails, fails, fails. It’s actually “single payer” on a very small scale.

        • JC

          Um, part of the story goes on to say that the backup insurance policy for the district is through Blue Cross/Blue Shield. So, no, the whole plan isn’t self-insured. So quit picking nits from you non-existent strawman.

          And as far my feelings about “profit” as it is related to the health insurance industry, yeah, I have a problem with the notion of profit being more important than people’s lives. Of people dying premature deaths and having substandard care because the bottom line of health insurers is more important.

          • goof houlihan

            Of course the school district wisely backs it’s self insurance with a stop loss policy. And of course, the stop loss policy costs more money as the aging demographic demands more health care, and the legislators demand that more things be covered, and it’s statins and downers for all.

  4. goof houlihan

    I don’t understand the concern about “cost being passed on to the taxpayers”. In this case the taxpayers are the employers and the costs can either be picked up by the employers or the employees, or both. It’s “both” in this case.

    • JC

      No matter who pays the cost–employers or employees–the burden falls upon taxpayers, who fund the education system.

      So if you’re not concerned with increased costs to taxpayers, then I guess you’re not the average taxpayer.

      More likely, you see that the increased health insurance costs come out of fixed budgets, so the shortfall will be made up by cutting other education expenses–like staff and/or programs.

      Or, in the alternative, the school district will cut benefits. Sure can’t raise taxes in this environment

      At what point do conservatives and republicans care enough about increasing costs and diminishing benefits of health insurance to advocate any realistic type of reform?

      • goof houlihan

        “Health care reform” always boils down to the one thing: taking my insurance and access to health care and giving it to someone else. Why would I support that?

        And I’m very familiar with budgeting for school districts and the sideboards that school equalization puts on school budgets. Competing public “goods” vie for the school district dollar, and the school board balances sports, music, art, readin, ritin, and rithmatic, with the demands of employees. The difference between SD7 and the USofA is that nobody’s printing funny money in the basement of Willson school and hiding the actual costs.

        • JC

          Well, maybe we should start reform by taking away any tax breaks you may be getting for your health care benefits. Why should I pay for your fringe benefits? You’re taking from me. Why shouldn’t I work to take something from you? After all, redistributionist policies work both ways. And as the pendulum swings…

          • goof houlihan

            “we should start reform by taking away any tax breaks you may be getting for your health care benefits”

            Taking is all you’re really advocating. Put lipstick on the pig, call it “reform”, but it’s really just taking from people who earn it and give it to people who don’t.

          • JC

            You just don’t get it. If you are getting untaxed heath care benefits, then I am subsidizing your health care.

            Why should I want to keep letting you get that tax break, at my expense, when you are not willing to participate in a reciprocal fashion with those who work, pay taxes, yet are denied health insurance?

    • How does a 9% increase in premium cost translate into a 20% cost to families?

      Thing is, goof – this is not sustainable. It’s not unfair to pass the cost off to the employee, at least I don’t think so – but that simply is not a sustainable plan for how our health care system is working.

      Health care makes up 18% of our national economy and takes up 20% of citizens budgets. If housing takes up 25% of our economy and it has to be propped up because it’s too large to fail, then what in the hell is health care’s role?

      Do we sit back and watch our economy get sucked down because of the increased cost of health care?

      It’s like the need for affordable housing in Missoula or Bozeman, only on a nationwide scale. I see it as we’re talking about ensuring a viable economy.

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