For most educators in Oregon, October marks the beginning of new health care plans through the Oregon Educators Benefit Board (OEBB). If you are like other educators, you may be wondering why the cost jumped so much yet the benefits declined. After all, wasn’t the purpose of the OEBB to create a statewide pool that would lead to lower rates?

Let’s look at how this change came about. During the 2007 legislative session, Senate Bill 426 was passed, creating the OEBB. This bill was the creation of the Oregon Education Association (OEA), more commonly known as the teachers union.

Prior to passage of SB 426, school districts, education service districts (ESDs) and community colleges were free to seek competitive bids for health care in the private market. One of those providers was the Oregon School Boards Association (OSBA). The revenues from this program helped fund OSBA’s operations. One of OSBA’s functions was and still is to provide support to local school boards during contract negations. Are you starting to get the picture?

More importantly, though, and the reason I opposed this bill, was it took away the ability for school districts to seek competitive bids. Interestingly, while the bill was working through the process, members were heavily lobbied to support it. I had a group of constituents, members of the Oregon School Employees Association, in my office one day explaining the bill’s features and asking me to support it. When they were finished, I asked them if they liked their current health care plan and the reply was overwhelmingly yes. In fact they had just completed a competition and were very pleased with the outcome. I then explained if SB 426 passed they would never be able to do that again, to which one replied, “They never told us that.” Getting the picture?

Folks, this was a bad bill in 2007 and it’s only gotten worse. Earlier this year, The Bulletin (May 16) wrote about the OEBB and its skyrocketing costs, with some rates jumping more than 20 percent. According to the story: Kaiser Permanente increased 10 percent per month; ODS 18 percent average monthly increase; Providence average rates more than 28.5 percent. This is under the OEBB statewide pool.

Perhaps the most notable statement in that article was by Bob Markland, Bend Education Association president. When asked about the new rates starting this month, Markland said they were alarming. Markland said, “I’m just disappointed that we can’t control our own insurance costs locally. We had such a positive experience with our previous carrier, and I think our membership appreciated that.” Bob, you are absolutely correct.

An analysis of “devaluation” for Bend–La Pine classified employees using comparable plans from 2009/2010 to 2010/2011 shows for a $10,000 surgery and hospital claim, after factoring in the changes in premium, deductible, copay and out-of-pocket expenses, the additional cost to the employee is over $2,200 under the new plan.

Another analysis by the four school districts that make up the High Desert ESD (Crook, Bend–La Pine, Redmond and Sisters) shows there could be significant savings to the employees if the school districts could opt out of OEBB and use the health care plans offered through the High Desert ESD. This analysis shows that the employees would save over $3 million if their districts could opt out of OEBB and go with the High Desert ESD plans.

Now you may ask why districts simply don’t leave OEBB. Unfortunately, SB 426 made it mandatory for school districts and ESDs to enroll, and they can never leave. Community colleges could opt in but if they did they could never leave. The law was changed in 2009 to allow any school district or ESD to stay out if they could show comparability and cost savings, which is why the High Desert ESD is not in the OEBB. However, they are subject to a review every three years by the OEBB, and if they are required to join they may never leave.

To add insult to injury, it’s nearly impossible to determine how much the OEBB is costing an individual district and its employees. That is because the OEBB will not provide individual district histories showing the health care utilization of its employees. Typically insurance providers provided monthly utilization reports allowing district officials to evaluate rates. They can no longer do this under the OEBB program.

Upon passage in 2007, OEBB immediately needed to hire 19 permanent positions and five temporary positions. There’s no telling how many positions there are now.

It is election season and the hot topic is the projected budget deficit. Everyone keeps asking where to make cuts. Well here’s one program to eliminate next year. It will both save taxpayer dollars and allow local control over health care costs.