School district needs to look before it leaps on self insurance

The Medford School Board is “just talking” about a substantial change in how healthcare coverage has been provided to district staff members.

For the second month in a row, the district has spent more than an hour during their meetings hearing about the potential savings such a switch could mean to the bottom line of the district. With savings, if not in direct cost reductions, but in efforts to limit the spiraling cost of health care coverage for future years.

District administrator Pat Sullivan assures district employees that at this point the board is “just talking” and that the district is “far away” from making a decision.

Meanwhile, the district’s insurance consultant is collecting price quotes for stop loss coverage and third party administration fees to present at next month’s meeting, making it the third meeting in a row where board members will just be talking about a major change in the lives of the 1,016 people who have healthcare coverage under the school district’s policies.

At a $7 million a year expense for the district’s health insurance premiums, board members have a financial responsibility to taxpayers to explore all potential cost saving options. Finding out about the risks and potential rewards of switching from traditional insurance coverage to a self-insurance model is an essential part of fulfilling this responsibility.

So far, the discussion has been dominated by varying degrees of sales pitches, noting that while the initial transition may be rocky, there are roses and sunshine to be had over the horizon.

When it comes to their family’s healthcare coverage and their personal finances, it is understandable for district employees to be skeptical about promises of better care at lower costs. This is not to say that the quality of care and potential savings are not there, but only when you chase roses and sunshine you need to be prepared for the thorns and sunburn.

District employees and their families need to be paying attention as the school board continues to explore the idea of switching to self insurance. They must not be shy about asking administration and board members questions and raising concerns. If nothing else, this allows board members and administration to seek out those answers themselves and be able to get a more complete picture of what such a change could mean.

Beyond this, the district also needs to be prepared to make a choice for the long-haul. Self insurance models have been successful, but they take years of implementation in order to see their promise fulfilled. If the district makes the decision to go the self-insurance route, it must be willing to commit to it for a multi-year cycle which would allow the district’s staff time to get off the insurance rollercoaster that they have been on for the past several years.

Sometimes things that are “just talked about,” never go beyond that phase, other times they move to implementation with the rapidness of an avalanche. Board members must take the time to listen to the positives and negatives and be sure to look before they leap.