Op-Ed: Goal: Save over $800 Million by Merging School Employees Health Care Plans

By: Senator David G. Argall (R-29)

In recent weeks, lawmakers in Harrisburg have debated several competing attempts to reform the archaic and unfair school property tax system that has existed in Pennsylvania since the 1830s. This critical issue deserves our undivided attention since it is the only tax that has the power to leave a person homeless. One major concern raised by both the supporters and the opponents of property tax elimination is the issue of rapidly rising school district costs, especially health care costs. A recent report by the state’s Independent Fiscal Office highlighted the fact that property taxes have grown far faster than the rate of inflation. Rising health insurance costs for school districts pose a major threat to both the education of Pennsylvania students and the wallets of taxpayers.

To address this growing problem, I am introducing a resolution to require the Legislative Budget and Finance Committee to study the practicality and potential cost savings of merging all public school employees into the same group health benefits package. The study will examine the benefits currently provided to school employees, the cost of current and future benefits, employee contributions, and other factors that could result from merging school employees’ health care insurance plans.

In current practice, each of the state’s 500 school districts negotiates and purchases their own health insurance package. Some of those districts cooperate with other districts, while others do not. Since larger groups are afforded better health insurance rates, covering all school employees under a single statewide plan or several large regional plans would allow every school district to leverage the considerable negotiating power of an exponentially larger group of employees.

A study compiled by the Hay Group in 2004 found that annual savings would be over $800 million. These efforts were supported by both conservatives and liberals, Republicans and Democrats, school employees and taxpayers. Ultimately, the issue did not move ahead due to opposition from special interest groups. Because the issue is both timely and incredibly important and the possibility for savings is so great, we have to try again.

As I worked to draft this resolution over the past several months, I sought input from taxpayers, school directors, health care experts and insurance industry professionals not only locally, but throughout the state. Their input was extremely helpful.

Every dollar committed to health care costs is another dollar we cannot invest in our children’s education and school property tax elimination. In speaking with teachers, taxpayers, and school board members, the prospect of skyrocketing health care costs taking money away from the classroom is among their most serious concerns. If the legislature wants to get serious about meaningful school property tax reform, we need to get serious about the spending. I am hopeful this resolution will be an important step in that process.

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