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Pay no attention to the people behind the curtain

Tuesday, October 04, 2005

MPS Health Care Arbitration, beating the dead horse edition

Yes, yes, I've written about the Milwaukee Public Schools arbitration decision before--a lot. But I A) have yet to hear a coherent argument as to why I'm wrong (including in the arbitrator's decision (.pdf)), and B) have found someone who agrees with me but does so more eloquently.

To sum up: The Milwaukee Public Schools and the Milwaukee Teachers Education Association did not reach a voluntary settlement in contract talks for the 2003-2005 contract. The primary hold-up was health insurance, and the district's refusal to settle for anything less than exactly what they wanted. As the union made more good faith efforts at offering fair compromises, the district drew a line in the sand and then walked away.

On the first day teachers reported to work this school year, the arbitrator hearing the dispute, Jay Grenig, ruled in favor of the district. The decision meant that the administration's risky and dangerous proposal was accepted, and changes to health coverage begin in less than a month.

This process has hurt the taxpayers of Milwaukee in two ways: One, the district's refusal to reach a voluntary settlement meant more than a year under the old, more expensive system. We're talking millions of dollars down the drain, here. In rejecting every fair compromise offered by the union, the district pushed its tax levy to the maximum to make up for the costs of its own intransigence.

Secondly, as Dominique Paul Noth of the Milwaukee Labor Press explains (no link, sorry),
Rather than imposing out-of-pocket costs on emplyers, the [MTEA] proposed across-the-board salary contributions whether a member used health care or not [. . .]. The rejected union plan [. . .] would have enlarged the pool of contributors and guaranteed the finiancial reduction in the health costs to the school board. [. . .]

Grenig's final decision reads like an educated guess that, while the teachers' approach would save more money definitively for the first years, the MPS approach would work in the longer term.
It's worse than that. Yes, it's awful that the administration's solution is bad for taxpayers now. But, as I've said before, as long as MPS self-funds its health insurance, the divergence within the insurance plans prompted by the decision serves only to drive this district toward bankruptcy. A concentration of high-cost ill employees in the expensive plan will outweigh the payments from majorities of teachers in the inexpensive plan, upsetting the risk pool and sending us toward ruin. Why Grenig couldn't see that, I don't know. I guess he just assumed (and you can see it in language like "significant overutilization of many services") that teachers would just stop getting sick. I think I'm getting sick now.

And as I have also argued here, nobody knows this. The newspaper finally admitted, last week, that the union's proposal also called for teachers to pay for insurance. They said, though, that the administration's "method would give teachers incentives to control costs and thus help slow the soaring price of health care--a goal not achieved by the teachers' proposal." This, too, is deceptive: The MTEA put years of research into a plan that would do exactly what MPS planned to do with their risky scheme--control increasing costs. From an MTEA newsletter, behind a membership wall, sadly (MTEA members, it's here):
Throughout the intensive mediation process this May, the MTEA's teacher bargaining team has repeatedly offered the school board's team creative, long-term solutions to rising health care costs. Our health and productivity management (H&PM) proposal emphasizes education, wellness, and prevention - not shifting costs to employees. Research indicates that a jointly-developed, proactive H&PM program could save MPS an estimated total of $90,000,000 in just three years. The board's team excluded this approach in its most recent "final" offer on May 26.
Noth also lets the media have it for faulty coverage on the issue in the Milwaukee Labor Press:
Local media apparently didn't read the arbitrator's 76-page decision [. . .]. If they had, fairness would have required a different emphasis to the stories, editorials, and talk-show glee that followed--including a realization that the union plan would have saved taxpayers more money, immediately and guaranteed. [. . .]

You certainly didn't hear [from news coverage] that the MTEA plan would have been instantly more generous to the taxpayers and also showed a social conscience in making higher-paid members contribute more than low-income workers.
Remember what I said last week--if the union plan had been selected, I would be paying about $960 for family health care this year. Now, if I moved to the HMO and maxed it out, I'd pay only $450, plus co-pays and drug costs. On the Aetna plan, we have a worst-case max of $600, plus co-pays and drug costs--maybe $800, tops, which is less than 2% of my income. Consider, though, an educational assistant with more than two people in her family, earning just $16,000. She would max out Aetna at $900 plus co-pays and drug costs, which could easily top $1300 or $1500 depending on the health of her family. Nearly 10% of income for health care? Unacceptable.

Next time you feel like complaining about how we high-paid teachers aren't contributing to our health care, ask why the arbitrator selected the plan that keeps my costs low and screws the paraprofessionals (and taxpayers!) instead. That's the real crime.

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