By Christian D’Andrea
MacIver Institute Education Policy Analyst
As of September 1, 2011, at least 25 school districts in Wisconsin have switched health care providers or plans, or opened their insurance bidding to outside companies. For 23 districts that have reported their estimated savings, this has led to an extra $16.8 million for education a review of data by the MacIver Institute has found.
With the summer deadline passed, many of Act 10’s changes are taking effect in Wisconsin’s school districts. Any district without a ratified contract for the 2011-12 school year has been subject to the bill’s changes since June 30, which include employee contributions for health insurance and retirement as well as the elimination of collective bargaining for matters other than salaries. These policies have created substantial savings across the Badger State, reaching into the hundreds of millions of dollars.
Act 10’s package of tools has allowed many districts to make policy decisions that are allowing school boards to keep their staff intact. Our earlier rundown of reported savings from these policies found savings of over $162 million in 77 Wisconsin districts – over $507 per student.
Amongst the state’s 15 largest school districts, 12 have created substantial savings from using the budget bill’s tools. The three others, who refused to reopen their contracts to enact employee contributions, appear to be headed towards layoffs as a result.
The Act’s de-emphasis on collective bargaining has allowed many school boards to make job-saving changes when it comes to district costs. In no place has this been as apparent as when districts bid out for coverage. Many communities are switching their health insurers through open bidding that allows private vendors to compete for contracts. These displays of smart consumerism are saving millions of dollars across Wisconsin.
As several districts proceed into the new school year without ratified contracts, these savings are a strong indicator of how Act 10’s tools are affecting schools. Several school boards are pressing forward with employee handbooks and instituting insurance programs that have created significant savings. In some cases, this new approach to budgeting, which came as the result of the new state law, can be the difference between teacher layoffs and retaining essential staff members in classrooms throughout the state.
The steady stream of new contracts has slowed to a trickle while summer fades into the new school year, but reports of health care savings have persisted. 25 districts have reported switching their health insurers or getting better rates through an existing insurer through competitive bidding. Of these, 22 have posted savings of over $100,000, and seven stand to save at least $1,000,000 in the coming school year.
As of September 1, 23 districts serving 79,475 students have produced significant reported savings through changing their teacher health insurance. This figure will grow as more reports roll in. This has created an estimated savings of $211.45 per student – a total of over $16.8 million so far in Wisconsin. If this number were to hold steady for all 881,886 of the state’s public school students, it would create a windfall of over $186 million.
|School District||2011 Student Count||Estimated Savings|
|Totals: 23 districts with reported savings estimates||79,475||$16,804,605|
Across these 23 districts, which range in size from 657 to 15,194 students but mostly register as the state’s smaller areas, the average savings were $730,634.99.
These figures show how school boards have been able to bridge gaps in funding by taking charge of their employee health insurance. The savings, through a combination of open bidding and competitive pricing, have helped some districts further offset budget cuts beyond their employee contributions. The emergence of a competitive marketplace in Wisconsin has helped reduce costs while providing a similar level of health care for the state’s public school teachers.
This 25-district sample size is small, but will grow as more school boards tackle their employee handbooks and adjust to the changes of Act 10. The savings inherent in shopping around for health care through competitive bidding is something that we’ve covered here before, and it’s no surprise that districts with more control over their administrative policies are finding benefits from the process. What this ultimately means is that these schools will have more money to spend in the classroom while continuing to provide a high level of health care to their teachers.