Will paid health insurance for retired teachers eventually go away? Can state afford to maintain benefit?

With all the DeKalb news, I apologize for not getting to House Bill 263 — a bill requiring that retired educators in the future pick up their own healthcare costs — earlier this session since so many of you wrote to alert me to it.

The bill states: A BILL to be entitled an Act to amend Subpart 1 of Part 6 of Article 17 of Chapter 2 of Title 20 of the O.C.G.A., relating to school personnel post-employment health benefit fund, so as to provide that any person who becomes eligible to participate in such fund on or after July 1, 2013, shall pay a premium which reflects the entire cost of such coverage; to prohibit the expenditure of public funds to subsidize the cost of health care; to provide for persons currently eligible; to amend Part 2 of Article 1 of Chapter 18 of Title 45 of the O.C.G.A., relating to the state employees post-employment health benefit fund, so as to provide that any person who becomes eligible to participate in such fund on or after July 1, 2013, shall pay a premium which reflects the entire cost of such coverage; to repeal conflicting laws; and for other purposes.

I am not the only person who heard a lot about the bill, which is unlikely to advance this year.

“I guess I received more telephone calls about HB 263 than any other this year, so I went and talked to the author, Rep. Chuck Martin, about it,” said Herb Garrett of the Georgia Superintendents Association.

According to Garrett:

The content of the bill was extremely difficult to decipher, and it certainly led a lot people to believe that it would mandate that all retirees pay the full cost of their health insurance (no state funds to pay the employer’s share). Rep. Martin made it quite clear to me that he had no intention of his bill affecting any current teacher or current retiree; rather, he intended that the provisions of the bill only apply to newly hired teachers (those employed after July 1, 2013) and only at their time of retirement (30 years away). All the additional language about how the provisions of the bill might apply to educators who had a “break in service” were also quite confusing, and Rep. Martin agreed that the section containing that language needed a major rewrite.

Now, I don’t think he ever thought the bill would gain much traction, and he’s right. Rep. Martin does feel very strongly, though, that a conversation needs to begin about the financial obligation that the state has to continue to furnish the employer’s share of health insurance for retirees while, at the same time, they have put absolutely no money aside to do it.

For the uninitiated, this is referred to as a government’s OPEB (Other Post-retirement Employee Benefits) responsibilities, and the Governmental Accounting Standards Board has for years required governmental agencies, both state and local, to either put aside money to cover those benefits or make a public declaration that they are aware of them (but, are not putting money aside at this time). Georgia started to put some OPEB dollars away a few years ago (I think they socked away $100 million one year.), but the very next year they used that money for something else (Imagine that!), and the OPEB fund balance stands at zero. Rep. Martin views this as a serious abdication of the state’s responsibilities, and he thinks the issue ought to be addressed. That’s what HB 263 was actually all about.

“To his credit, the sponsor sheds light on a real problem — Georgia isn’t properly funding post retirement health insurance benefits for public employees. However, we disagree with the approach taken in this proposed solution to the problem,” said Tim Callahan of the Professional Association of Georgia Educators. “At a time when our state is struggling to attract the best and brightest to the teaching profession–particularly in STEM fields in which young employees could make more in private industry — eliminating an attractive benefit sends a contradictory message about how state policymakers value the teaching profession.”

I asked Martin for a comment on his bill and he explained:

First, the bill on the web has a serious defect in that is says the state employees, including teachers, hired after July 1, 2013 would have to pay for the entire cost of the health insurance while “active” and in retirement – this was never the intent of the bill but instead a drafting error.

The intent of the bill as it was meant to be drafted was to have state employees, including teachers, hired after July 1, 2013, to pay for the full cost of their healthcare in retirement when they become eligible as currently defined in the system because, in my opinion, continuing to add people to an underfunded system endangers those currently in the system.

The bill raises issues that are worth discussing. Among the many emails and letters on House Bill 263:

<blockquote>I checked to see if your paper had written anything concerning HB 263 and found nothing. It is obvious that this bill will ensure that only the least talented educators will seek employment in Georgia. I foresee a time soon if this bill is passed that Georgia will have the lowest educational rankings in the United States. Could you please research this situation and write an article about it?</blockquote>

–From Maureen Downey, for the AJC Get Schooled blog

164 comments Add your comment

PLEASE2

March 7th, 2013
4:40 am

PLEASE!!! What else can they extract from educators? All I can remember since I entered the teaching profession some 20 years ago is how much we do for the children and the community. As usual, we are the first to be hit with furloughs(past 5 years) and overall pay cuts(2%) in Cobb Scchools. This is the worst tragedy. Why do people believe we will deliver the best we can offer to students with so little in return?
Think about it and be afraid–Be very afraid!!!

Private Citizen

March 7th, 2013
5:25 am

Think about it and be afraid–Be very afraid!!!

Be afraid of joining the service system of the rest of society, to get what they get? The greater context is that the U. S. is in a peculiar situation with the cost of healthcare, which is basically 4x greater than a rich country that has it figured out. It costs 4x as much because we spend twice as much and provide half the services. Bottom line is that when school teachers receive health-cost supplement, it removes them from political concern and turns them to mush on the topic since they get “a special deal.” As much as I would like to have half of my health care costs paid for forever, it is payola that removes me from the greater populace. In the interest of advancing the country toward a health care system that covers everyone, like every other rich and civilised country, it is a good thing to remove supplemental pay systems that support the status quo with the outrageous costs of policies and coverage. As a school teacher, this cost seems reasonable only because you are paying half of it. The insurance companies are doing a serious exploit by getting the state to pay them in this system of outrageous costs. So yes, lose the health care supplement for both working and retired teachers, and then teachers can join the rest of the labor force and realise the predicament in the U. S., and maybe even take an interest in doing something about it that will serve all of the workers and residents in the U. S. PS I do not want a “special deal” that my students and parents do not have. And if I leave or take time off from teaching, I want the same provision of services.

People do not realise the innovation-killing aspect of the current system, as especially families with children, the worker is afraid to be on their own or be an entrepreneur and instead stay tethered or get abused at some dismal job solely because it is an attachment to the health care system.

Private Citizen

March 7th, 2013
5:34 am

how much we do for the children and the community

Getting your outrageous health care cost supplemented when they don’t is not service to the children and the community. Do you know that in rich countries, that in addition to medical, the social care package includes dentistry for all citizens? Do you realise how backwards and behind we are in the U. S.? Of course, this means that doctors do not routinely live in half-million to million dollar homes, and there’s likely more doctors, since the through-put is not controlled by the extremely uppity “AMA” with their “We are Gods and different from everyone else” complex that they train into young doctors, which is really just cover so they can perpetuate their financial exploit as “business doctors,” you know, when the doctors own the equipment and provide the services and they separately bill for both of them, a system where routinely people spend 3 days in the hospital or ICU and leave with a bill exceeding $100,000. Meanwhile, now that there is the internet, people in rich countries outside of the U. S. report, “Oh yes, I went through that. It cost me thirty bucks.”

Private Citizen

March 7th, 2013
5:44 am

It is not time for the higher order thinkers to examine the term “inefficient markets,” which is a subset of great economic activity.

-Of course, to be a “rich country” with services, your populace has to be educated and available talent brought to fruition, something that is not going to happen in Georgia with local school boards making a caste system with their one “award school” and rest get the cracked buildings, raggedy books, and overt process evaluations on teachers. And let’s not forget the highly paid role-playing super and their merry band of thieves.

Private Citizen

March 7th, 2013
5:48 am

It is now time…, except that all of the U. S. internet web definitions of “inefficient markets” are based on personal investing, which is not the context. This, too, is something people in the U. S. do not know and do not understand, that finance and business outside of the U. S., are taught completely differently, with different aims, modes, and values. “Business” is not something that only serves finance and investors, something has been thoroughly institutionalised inside the USA, whereas if you go to a business school outside of the USA and show this approach, they’ll look at you like you’re a sociopath, as “business” serves and affects everyone, not just the %$%$% taking all the money.

Private Citizen

March 7th, 2013
5:52 am

school personnel… shall pay a premium which reflects the entire cost

Sounds good to me. Clear as a bell. Welcome to the world of the students and parents.

Private Citizen

March 7th, 2013
5:54 am

“An inefficient market is one in which (services) are underpriced or overpriced by market participants.”

http://www.investorglossary.com/inefficient-market.htm

Cindy Lutenbacher

March 7th, 2013
5:59 am

Part of me wants to protect teachers. But another part of me agrees with Private Citizen–I want the entire citizenry to face the fact that we are truly as backward as can be in our dysfunctional health care system.

Mama S

March 7th, 2013
6:18 am

School personnel (who have been regularly unappreciated, underpaid, and offered few chances for advancement) will pay the entire cost (as they enter the 60-year age bracket and the cost goes up and their retirement income drops to 2/5 of their earned income) of the insurance (which will not include vision or dental because those are county supplemented and are too expensive to add at the age of retirement).
On a happy note, retired school personnel will be eligible to work as Walmart greeters for minimum wage and no benefits — but much more appreciation from the public.

crankee-yankee

March 7th, 2013
6:20 am

@Private Citizen

It is a matter of morality, something in short supply in this state’s government. In compensation for entering the “business” of education, there are numerous private sector “benefits” teachers understand they will never get. Year-end bonuses? Unheard of. Profit-sharing? Overtime? Negotiating a salary? Not in a right-to-work state. Yet, people still enter the profession since wiser decision-makers in the past made promises about various benefits that would, in the big picture, provide a modicum of balance for those things we do not share with the private sector.

With the current push to strip teachers of what benefits we do enjoy, there is a very real possibility, nay probability, the legislature will create a situation ripe for unionization in the teaching ranks. Yes, GA is a right to work state but ever hear of “working to contract?” That’s not a “strike.” The path we are traveling is moving the state closer to a scenario the “good ol’ boys” fear. I will enjoy watching how this plays out.

MiltonMan

March 7th, 2013
6:29 am

Teachers supported Obama & therefore ObamaCare. Congratulations teachers on getting what you voted for!

HS Math Teacher

March 7th, 2013
6:30 am

The trade off should be, the State will get the hell out of the way, and the administrators will pull in their fangs, and let these newcomers …. TEACH.

crankee-yankee

March 7th, 2013
6:32 am

Oh, and lest we forget, GA refused the chance to create the state-level healthcare group. So the feds will impose one on us. I guess that lets the “decision-makers” point fingers, much easier than actually doing something.

said this was soon

March 7th, 2013
6:35 am

we owe this one to Obamacare, soon the ppl in Atl will drop all insurance coverage and say “go to the exchange”.

and those of you that think my insurance won’t change just because you are not a teacher better think again.

Obamacare states to cover the employee, it does not have to cover the spouse

Opps, guess someone forgot to explain that one

mountain man

March 7th, 2013
6:43 am

Almost all private-sector companies have taken away this benefit – because the cost is ENORMOUS. I used to work for a company that had a “point system”, so you could retire and keep your insurance if the total of age and years worked totalled 80 points. They laid me off before I reached those points. Think about it – teachers can retire after 30 years of service – if they enter teaching at 22, that makes them eligible for retirement at 52 – younger than I am. Medicare doesn’t kick in until 65 so that is 13 years of insurance payments, probably at $12,000 per year – over $150,000 in benefits paid – equal to an additional $5000 per year in benefits.

WilieJo

March 7th, 2013
6:58 am

Medical benefits for life were created in another age when the long term effects of massive spending were not well understood or, more likely ignored. I would not change the bargain with existing teachers but know that it’s time to sever the link between retirement and healthcare. Future teachers can take that into account when they pick their career like the rest of us do. It makes no sense to impoverish the public to pay for the healthcare of the public servants.

dc

March 7th, 2013
7:15 am

in 30 years, we’ll be forced into govt run healthcare. it really won’t matter. then everyone will have to beg a bureaucrat to approve their medical procedures.

oldtimer

March 7th, 2013
7:16 am

I guess if teachers loose this benefit, all state employees, including college and university level personnel will losse it. University personnel have much better less expensive health insurance than any other state workers….

South Georgia Retiree

March 7th, 2013
7:19 am

What else can we expect from state leaders who have consistently backed away from their responsibilities? Public education is well on its way to being dismantled, so such legislation as HB 263 fits right in. To make it even muddier, Rep. Martin admits his bill had a serious flaw in the draft that was read and submitted. As Dr. Garrett points out, state leaders chose not to set aside money for the future costs of this promised benefit for teachers, and they were so negligent that after actually designating $100 million one year, they took it back and spent it on something else. What does that tell us about the sheer gall and vacant financial skills of the folks under the dome? It says they don’t have a clue about anything except killing the one institution that can make Georgia whole again. Say what you will, public education is now hanging by a thread which will soon break and give us the chaos we deserve for electing such uncaring and incompetent leaders.

Slo Pony Dog Food Company

March 7th, 2013
7:20 am

This is simply the bill coming due for supporting only one party in the legislature (and the governors office) for decades. The education cartel has no allies with the power to help them.

Better wise up. Worse could be coming.

Momcat

March 7th, 2013
7:31 am

Several years ago I read an ajc article about this. If I remember correctly, the article stated retiree teacher healthcare cost significantly more to the taxpayers of GA than active teacher healthcare. There is something wrong with this.

catlady

March 7th, 2013
7:33 am

So…What if a teacher decides to continue working past 30 years. Technically, that person is “eligible for retirement,” would the state then quit funding their portion of the still-active teacher’s health insurance?

And, could you ask him about any change in provision for legislators. Now, I believe, they vest in only a matter of MONTHS of becoming an employee, unlike teachers. They will be quick to say that, although the legislature is in session for only 3 months a year, they “work” all the time. Well, bub, SO DO TEACHERS!

Funny

March 7th, 2013
7:40 am

Yes it will go away. Teachers are not in the profession to get rich but there are some perks that helps with the lack of pay. One is being able to retire after 30 years and half way afford to live. Having health insurance is a big part of that. I am a teacher with 25 years experience and I can say that most teachers need to retire after 30 years. I have saw it over the years not many teachers with over 30 years in the classroom are very effective. Some of these are dear friends of mine. They mean well and trybut they can’t seem to keep up. I myself see my skills slipping even though I have tried very hard to stay up and tuned to my students so that I will not be that ineffective teacher. A vast majority of retired teachers have to work at some job after retirement to make ends met. I am so worried because the trend in this country now is to take from those who worked for something and give it to those who did not. Look at all the entitlements given to the young, healthy, able bodied young people in our country. My mother who relies on the Social Security that SHE

Mountain Man

March 7th, 2013
7:47 am

“I have saw it over the years not many teachers with over 30 years in the classroom are very effective. ”

You are a teacher? Do you teach English in Dekalb County?

10:10 am

March 7th, 2013
7:54 am

Past AJC articles on teacher healthcare premiums have stated that the state—we Georgia taxpayers—actually foot around 75% of the cost.

Not “half” the cost, as some above mistakenly seem to believe.

Private Citizen

March 7th, 2013
7:58 am

Mountain Man stop being a jerk.

Private Citizen

March 7th, 2013
7:59 am

Maybe you should learn the writing term “stream of consciousness.”

Private Citizen

March 7th, 2013
8:02 am

Listen to 10:10, they’re correct to fault the 75% supplement because teachers fresh out of teaching school don’t even know the cost, they know what they pay and think that’s the cost, except that 10:10 only works half the hours at twice the pay, being all “non union” and all. 10:10 also spends many hours with a hook in the water trying to catch the Loch Ness Monster.

Dekalbite@Dc

March 7th, 2013
8:06 am

“in 30 years, we’ll be forced into govt run healthcare. it really won’t matter. then everyone will have to beg a bureaucrat to approve their medical procedures.”

LOL- As opposed to the insurance companies who do such as excellent job.

Read the recent in depth Time magazine article regarding where the profits for health care really go – not to doctors and nurses – and certainly as patients we pay way more than any other country for the exact same procedures (with the exception of Medicare – an organization that does control costs). We will never control health care costs until we can extend Medicare down to age 50. We cannot continue to pay 20% of our GDP to health care. This is economically unsustainable. The for profit market is not working for health care because when you are sick and in pain, you really don’t have a lot of “choice” to participate in the health care market or to”shop” around. That makes it unique in the marketplace and in addition easy prey for those seeking enormous profits.

Private Citizen

March 7th, 2013
8:06 am

10:10 probably has a side job doing “medical billing” or works as a medical assistant @ $70k/year. Hey, This is 10:10 calling, Mrs. Snirt-Snirt. When are you planning on paying this $45,000 bill for the gallstone you had? Don’t you feel better now? According to my records from ChoicePoint Data collection, you

Private Citizen

March 7th, 2013
8:08 am

you’ve got a cat and a bicycle. Time to get real, Mrs. Snirt, When are you going to pay?

Private Citizen

March 7th, 2013
8:09 am

In rural Georgia, you can always tell who is the medical assistant. It’s the only house on the street with a new car.

Private Citizen

March 7th, 2013
8:20 am

It is said that there are three interlopers getting the revenue out of the need for healthcare: insurance companies, hospital administration, and pharmaco – the pharmaceutical industry.

Everyone knows that outside of the United States, it is illegal for pharmaceutical companies to advertise specific drugs in the public media, right? This is for the simple reason that the practice adds cost to the public, not to mention, doctors are supposed to be the ones choosing drugs for patients, not patients self-prescribing based on a television/ magazine/ radio ad.

indigo

March 7th, 2013
8:20 am

Our current political and economic situation seems to get more complicated with each passing day.

However, once you cut thru all the lies and doublespeak, it’s actually very easy to understand. All you need is to know the following two things:

1. The rich get richer and the poor get poorer.

2. Money talks and BS walks.

That’s all you need to know. And, these two things will NEVER change.

Private Citizen

March 7th, 2013
8:22 am

It is my personal theory that in the United States, the cost of healthcare is directly contributing to the high cost of higher education. The two seem to have gone up together in cost. Someone said they saw the cost of tuition at their university double during the time they were studying.

Private Citizen

March 7th, 2013
8:25 am

these two things will NEVER change

They won’t change with your “there is nothing I can do” form of democracy. The laws where changed to allow the corporate interests to simply buy off members of Congress. There are movements right now to “get the money out of politics” and interrupt the “a corporation is a person” funding method to congress.

Private Citizen

March 7th, 2013
8:27 am

Indigo, Things have changed. Please review the Ed Asner animated video: http://www.youtube.com/watch?v=S6ZsXrzF8Cc

Clarence

March 7th, 2013
8:35 am

The money that was set aside for OPEB was indeed spent on something else… it was spent on avoiding further cuts to education during the recession.

indigo

March 7th, 2013
8:48 am

Private Citizen -”there are movements right now”

The situation I described did not just happen. It has been this way for many years now.

I do not see any changes at all. Corporations have a grip on our political system that will be next to impossible to break.

I don’t have any hope at all.

clem

March 7th, 2013
8:49 am

turn lose the cost accountants to show folks where their health care dollars go and results. and then show linkage to all the garbage americans eat and are served…could reduce health care costs immediately

Bob

March 7th, 2013
8:50 am

For the most part, teachers won exemption from the 12.4% Social Security tax that the rest of us have to pay. That tax is being used to fund the daily operations of the country instead of being in a “lock box” as Al Gore suggested it should. Teachers get retirement benefits as young as 55 years of age while the rest of us wait until we are 67. Maybe teachers should take the money they should be paying into SS and invest it to cover the cost of health benefits later in life. The proposed bill does not call for teachers to start paying for another thirty years so they have time to plan.
@PLEASE@ “All I can remember since I entered the teaching profession some 20 years ago is how much we do for the children and the community.” Please, compare retirement benefits between you and the rest of us and be happy with what you have. You pay less in taxes than the rest of the community and teachers never complain about not having to pay into SS.

homeschooler

March 7th, 2013
9:00 am

@ Private Citizen “It is my personal theory that in the United States, the cost of healthcare is directly contributing to the high cost of higher education. The two seem to have gone up together in cost.” You might be right but I believe that both continue to go up because they are so often not paid by the individual so there is no demand from the public to keep costs down. When your college tuition is entirely covered by loans/grants etc.. you’re not noticing how expensive it is getting. Most people don’t look at each individual fee that these colleges charge. The people I know who pay these costs totally out of pocket ask questions about every single fee. The same is true of the insurance companies paying for medical bills. I never look at all the charges on my bill ( I should but I don’t). I just pay attention if there is something my insurance doesn’t cover. On the other hand, I have family members who pay for all medical appts, procedures etc.. out of pocket and they call around, get the lowest prices, ask questions about fees etc.. It just goes back to the fact that people are not careful with other people’s money. Yes, ultimately it is their money but when it doesn’t “feel” that way they are not paying attention. This makes it easier for colleges and medical practices, hospitals etc.. to keep raising prices. Just a thought.

Private Citizen

March 7th, 2013
9:04 am

It has been this way for many years now.

Reagan is the guy who grabbed the wheel and turned the corner into corpro – klepto- fascisto – tocracy. They did by changing as many laws as possible including the ownership of major media market. Socialist Marvin Harris (cultural anthropologist?) does a real swell job describing what has happened. He attributes it to centralised power, centralising ownership. According to Harris, this is also why employees do not care about anything now, when you walk into a corporate retail store and the employee acts like “I don’t know you” or the car dealership warranty people do the same, meanwhile the stuff you just bought doesn’t work right or keeps breaking. Vint Cerf of Google has observed that in 1975 there were 1800 different telephone companies in the United States. Meanwhile, today in Georgia in 2013, there is one company with a monopoly on wired internet. (and the other company, ATT, wants out of the wired / DSL business, is rolling up services, denying service).

I think we can use the year 1975 as a reference from when transition to centralised ownership of markets began to occur.

reality check

March 7th, 2013
9:06 am

This is something that is in my realm of professional expertise and I have first hand knowledge that goes well beyond anything being published in the newspaper.

The State Health Benefit Plan is in a death spiral largely of its own making. I am no fan of Obamacare, but it hasn’t taken effect yet. There have already been billion dolar plus cost shifts to State employees as the State has cut back funding and raided the reserves. There are things that can be done to control costs for both actives and employees that are not being done because the bureaucrats do not want to listen to anybody but the consultants who got them in trouble in the first place. Proven approaches that have worked in other states are not even being considered. The Board of the Department of Community Health – the agency in charge – rubber stamps anything the bureaucrats suggest. Deal actually has considerable expertise in this arena and has forced the agency to put the program out for bid again this year. That is not to the agency’s liking, so because they have the autonomy not to change the plan design or approach nobody can anticipate improvement.

Private Citizen

March 7th, 2013
9:06 am

typo: Sociologist Marvin Harris (cultural anthropologist?)

note: Harris is an academic, has no political slant whatsoever. Mainly he wrote books about cultures in countries out the USA until he started to ask himself, “How come nothing works any more?” about home.

Private Citizen

March 7th, 2013
9:11 am

homeschooler, you’re right. It is said that the “college tuition” has gone sky high because of the open debt spigot from the finance / fed people enables tuition to go up.

mabia

March 7th, 2013
9:19 am

There are two types of educational programs available to aspiring medical assistants. Some
schools offer a one-year certificate, or you may complete a two-year associate’s degree from
an accredited school. The coursework for medical assistants will include medical terminology,
math and science, first aid, medical billing, and more.

reality check

March 7th, 2013
9:20 am

As far as retiree costs vs actives, of course retirees cost more. There are more retirees than actives on the State plan and the older people get the more medical costs they incur.

Duh.

However, once someone reaches 65 they are eligible for Medicare, which pays before the state health benefit plan. State retirees can purchase Medicare Advantage plans thaqt provide excellent benefits for premiums that are far less than what the State Health Benefit Plan charges. In short, the State profits from the post 65 retirees.

The post 65 retirees actually really like the Medicare advantage plans sold by the dirty nasty insurance companies. Those dirty nasty insurance companies are not being reimbursed more by Medicare, so it doesn’t cost the taxpayer anything, but the government is so bad at administering Medicare they actually make a profit. And they ask their senior members to rate how they are doing. The approval rating? Over 95%. When was the last time our government received an approval rating that high? In fact, when was the last time they asked what we thought?

reality check

March 7th, 2013
9:25 am

Georgia teachers are not exempt from Social Security taxes. Some City of Atlanta employees (about 2500) opted out of Social Security a few decades ago, but not teachers.

reality check

March 7th, 2013
9:31 am

Speaking of Obamacare, one of the interesting things is that starting January1 there is a limitation on how what percentage of pay a plan sponsor – in this case the State plan – can shift to the employee. It is limited to 9.5%.

The non certificated education workers – bus drivers, para professionals, cafeteria workers, custodians, etc ( there are a lot of them) are already paying much more than 10% of their pay to the benefit plan. In some cases – not just a few – more than 50% goes to pay benefits.

I have reason to believe the State is not even aware of this requirement, much less have a strategy for adedressing it.