New report: Vt. could save millions if schools transition to single-payer health care

October 29, 2014

By Shelby Cashman

Vermont schools could save millions of dollars in health care costs according to a new report released Tuesday.

The study was ordered by the Vermont School Boards Association and it documents the enormous cost of providing health care to teachers and staff at the state's K-12 schools. It shows what switching to either single-payer or a Gold plan under Vermont Health Connect could save schools. But without actually seeing what single-payer looks like, critics say the study is premature.

The Vermont School Boards Association says health care reform is coming and schools need to be ready and informed of potential outcomes and savings.

"Our level of health care benefits is among the most generous of any employers in the state of Vermont. Any change that could bring about teacher health care benefits that are more in line with the majority of Vermonters likely will result in substantial savings," said Steve Dale, Vermont School Boards Association.

KSE Partners, a well-known advocate of single-payer, conducted the report to look at the financial impact of switching to either single-payer or a Gold plan under Vermont Health Connect.

Total payroll at Vermont K-12 schools next year is estimated at $920 million. The School Boards Association says $202 million of that is for health care. The employees will pay another $33 million as their share of insurance premiums.

The study found that current health care plans offered to school district employees are more generous than anything available through Vermont Health Connect and pushing all school employees into Health Connect's gold plan would cut school district costs by $39 million.

The study says if the state were to switch to single-payer health care and schools were no longer responsible for health care benefits school districts would save up to $119 million.

In a statement, Joel Cook, executive director of the Vermont National Education Association, the state's largest teachers union, says the NEA has always supported a move toward single-payer, but...

"There is nothing new about this announced conclusion regarding what employees in schools have, apart perhaps from its use of specific numbers. But, we all know that there are no specific numbers to plug into funding formulas yet."

Health care reform critic Darcie Johnston agrees.

"They don't have the single-payer, they don't have the financing, they don't have what it's going to cost and what's going to be covered," said Johnston.

Scott Mackey is one of the authors of the report who is also an advocate of single-payer.

He says his firm recognizes that we do not yet know the specifics of single-payer. But the idea that there could be room for savings is important to get out there as teachers and school boards head into contract negotiations.

"What we hope to do in setting up the model is when we do have a financing mechanism we'll be able to come back with more precision," said Mackey.

The study also notes that the cost could shift to employees through new payroll taxes and all of the savings for schools could be erased if the legislature requires schools to offset those costs by paying teachers higher wages.