Scott administration officials continued Monday to push a plan they say could achieve significant savings statewide in health care costs for teachers.
Tax Commissioner Kaj Samsom insisted taxpayers could save a net $26 million a year under a plan where teachers would be required to negotiate health care benefits with the state and change to plans with health savings accounts to create an incentive for people to spend less.
The idea almost passed the House last week, falling short only when House Speaker Mitzi Johnson, D-South Hero, cast a vote to scuttle the plan. Sixteen Democrats crossed party lines, along with six independents, to vote for Republican Scott’s plan. The defection by Democrats suggests some might join Republicans to sustain a possible budget veto and help push Scott’s cost-savings plan if a special session is called and lawmakers have to return after this week’s expected adjournment.
Democratic leaders House Speaker Mitzi Johnson and Senate President Pro Tem Tim Ashe say the $26 million in savings is going to happen anyway because of the change in teachers’ health care plans. They say local school boards can negotiate with teachers and achieve the same savings. Johnson and Ashe accuse the governor of using the change in insurance plans as a ruse to interfere with labor negotiations.
Rep. Janet Ancel, head of the House tax writing committee, says the Scott administration has likely overstated the savings. She says in the best case scenario, the amount would represent half a year’s savings, or $13 million, and in the worst case scenario Ancel said the reduction in spending could be as little as $8 million.
The governor has threatened to veto the state budget if lawmakers don’t incorporate a statewide teacher’s contract for health care into one of the remaining education bills before adjournment.
On Monday, House and Senate leaders were expected to meet with Scott to discuss ways to reach agreement on the state budget and education spending. In addition to leadership, several key lawmakers, Sen. Jane Kitchel, chair of Senate Appropriations, and Rep. David Sharpe, chair of House Education, were also at the Statehouse on Monday. The full House and Senate are set to return on Wednesday and Thursday.
Samsom said Monday that last week’s House floor debate was filled with “misinformation” about whether savings under the Scott-backed plan were real.
“Having sat through the floor debate, there was a lot of misinformation, a lot of misunderstanding” and some incorrectly argued the savings were “mythical” or “a pretense” for a comprehensive statewide teachers’ contract, Samsom said. Some lawmakers also didn’t believe teachers would not have to pay more or get less comprehensive coverage.
Teacher unions and local school districts have historically negotiated health insurance, along with wages and other labor issues. Moving health care negotiations to a statewide level would represent a substantial shift that some labor supporters have vigorously opposed.
The state’s largest teacher’s union, the Vermont National Education Association, says health care is part of a package of benefits that should be negotiated with local districts, the employer.
Rebecca Kelley, Scott’s spokesperson, is pushing for a statewide health care contract now because all teacher contracts are up for renewal this year. That’s because after 2020, the Affordable Care Act calls for penalties on so-called Cadillac plans that many teachers have. All teachers must move to less valuable plans to avoid the penalty.
Teachers would be expected to pay 20 percent of premiums, as opposed to an average of 14 percent currently.
The higher deductibles and copays would be covered by taxpayer funded health savings accounts.
Moving to the HSA plans would save approximately $75 million, the Scott officials said, in part because teachers would be expected to seek less expensive care if they have HSAs and have “some ownership” in what the procedure costs. Of that $75 million, teachers would get back $49 million to cover higher out of pocket costs. The remaining $26 million would be available for tax relief.
The $75 million in savings is based on estimates by insurance actuaries, Samsom and Keller.
Sexual dysfunction drugs and infertility treatments are the most significant procedures that would not be covered under the new plans versus the old, Samsom said.
Samsom disagreed with the legislative leaders on Monday. If negotiations continue to be done locally, district by district, health care savings won’t be achieved, he argued. Kelley said “a once in a lifetime opportunity” for savings would be missed with all the contracts coming up at the same time. Seven districts have already settled contracts and the tax commissioner said their pattern was not sustainable statewide.
“Nothing’s proof positive, but it is a bellwether and it is I think a warning for the state and for school boards that it’s a complicated area,” Samsom said of the seven districts. “It’s a whole new world for negotiators on both sides.”
Officials insisted the change to HSA plans would result in savings but not in less quality care.
“Less health care and less costs are two different things,” Samsom argued. He gave the example of someone with a “boo boo” on their finger who, because they have an HSA might seek an urgent care center instead of more expensive care at a hospital.
