Saturday, October 29, 2011

No-bid naughtiness: the details so far….

You’ve probably already forgotten, and frankly, we wouldn’t blame you, that we introduced this subject here.  And then we teased you to be ready for a follow-up here.

We’re now ready to provide that follow-up.  Our only reason for the delay is that we were busy enjoying life, if you don’t mind us doing so.  We visited North Jersey, where we were born and raised, to visit our daughter and family, who relocated there in recent months.  And to join in a partial family reunion in the Lancaster, PA area, heart of Amish/Pennsylvania Dutch country.  It was an enjoyable and rewarding several days.

Back to business; we promised we’d update you with specific information once we had it, and here we come.  We also need to tell you that the activity level in this subject area is far higher than we had anticipated.  As so often happens, once you start looking into things, new insights and information start coming your way.

Before we report on what we’ve found, you might want to read this article: teacher's health insurance.  Serendipitously, we got the link from a friend; it’s ‘right in the wheelhouse’ of our discussion, and you should find it illuminating.

As to specific information, here’s what we have so far:

Brunswick School Department insurance figures, provided by their Finance Director, are as follows:

Total: $4,805,000, of which $4,430,000, or 92% goes to MEA coffers, and 3.4% goes to the MMA.  (MEA is the Maine Education Association – the state teacher’s union; MMA is the Maine Municipal Association – the state ‘union’ of municipal governments.)

Employee Medical $4,430,000; from MEA benefits trust; these are ‘public funds only.’  Employee contributions for medical insurance are $533,154 in addition to employer share  of $4,430,000.  In other words, total funds to the MEA for Brunswick school department employee health insurance are a shade under $5 million.

Employee Dental $150,732; from Securian.

Workers Compensation $136,934; from MMA.

Motor Vehicle  $7,595; Kyes Agency, Farmington.

Liability  $19,985; Kyes.

Property Casualty  $60,024; Kyes.

Let’s extrapolate those figures to statewide totals.

Brunswick has less than 2500 students, in a state that  has about 180,000 total.  If the per student payments to the MEA and MMA were equal state wide, the school departments would be spending a total of nearly $360 million on insurance with the MEA, and $9.8 million  with the MMA.  Here in Brunswick, we’re sending the MEA about $2,000 per student on employee medical alone.

Wow times twenty! 

On the municipal side, here are the figures:

MMEHT – Health Insurance - $1,646,576.79 of which $1,332,621.00 is paid by the Town of Brunswick, and the remainder paid by employees.  (This is the health insurance program run by the MMA.)

MMA Worker’s Compensation Pool - $183,032.83 all paid by the Town of Brunswick.

MMA Property & Casualty Risk Pool -  $156,654.30 all paid by Town of Brunswick.

(Everything else is down in the noise for or purposes here.)

Summing up, from what we know, our municipal government spends about $2 million on insurance annually with the MMA.  If Brunswick is typical, the MMA does about $140 million in total insurance business state-wide.

Based on figures we’ve seen in recent years, this insurance business yields about $8 million in excess revenue (“profit” in business terms) for the MMA.  If the MEA has the same ‘profit’ margin, their insurance business would turn a ‘revenue excess’ of more than $20 million.

In both cases, since neither is a public corporations with stockholders, these profits are available for use as the organizations see fit – most typically, in partisan political activism and lobbying efforts.

These figures set the stage for examining activity in the Maine legislature in recent months.  Two bills have been passed and signed into public law that address the conduct of MEA insurance operations.

The first began as LD 1326, “An Act To Allow School Administrative Units To Seek Less Expensive Health Insurance Alternatives.”  You can find the status summary for the bill here.  If you do, the most important thing to note is that the bill passed on a largely party line vote.

The law, as passed, is not a mandate of any sort; it simply requires that school districts be given access to claims experience information they need to pursue the option of competitive bids for health insurance; information that the MEA and their selected insurer have been able to legally withhold in the past.

The second bill, which began as LD 404, also became law, and is entitled “An Act To Assist School Administrative Units In Providing Health Insurance to Their Employees.”  In basic terms, this law requires that school department administrators seek competitive bids for health insurance for their employees at least once every 5 years, rather than being permanently locked in to the MEA statewide plan.  Pretty radical stuff, huh? 

According to reports we’ve received, the MEA devoted considerable effort to lobbying against these bills.  They were unsuccessful, as the new legislative majorities were supportive of competition as a fundamental method for delivering best value for taxpayer dollars.

This did not sit well with the teachers’ union, and the MEA is therefore pursuing further legal action to have the laws overturned.  You can read about it here.  This press release reads, in part, as follows:

Maine Education Association Challenges New State Health Care Laws

10/14/2011 03:23 PM ET

The MEA's Health Benefit Trust, which covers tens of thousands of Maine educators and their families, contend that the new laws will weaken its system.

The Maine Education Association's Health Benefit Trust is challenging two new Maine laws it says will weaken the system that covers tens of thousands of Maine teachers and their family members.

The Health Benefit Trust filed a suit in federal court Oct. 12 aimed at blocking the implementation of LD 1326, which requires the Trust's insurer, Anthem-BlueCross and Blue Shield, to release the claims history or "experience rating" for any school unit that requests the information.  (Oh the horror!)

In addition, the MEA's board of directors has authorized a legal challenge to LD 404, a new law which requires the Health Benefit Trust to use a competitive bidding process and to create a lower-cost insurance option by July 1 of 2012. 

The full statement is loaded with the equivocation and stereotypical rhetoric of politically protected special interest groups; we choose not to confront you with all of it, lest you suffer gastric unrest.  But you can go for the full Monte if you wish; just click on the link above.

Hence we come to this: what is our point in discussing all of this? 

Lacking anything more compelling, we suppose it’s to ask these questions:

1) Why would one party join forces with a special interest, very powerful union, to block ordinary taxpayers from being able to access the benefits of the competitive open market?

2) Why would the Maine Teachers’ Union be so willing to go to the mat, and invest big lobbying dollars, to protect their established monopoly in school department health insurance coverage?

The questions, we believe, answer themselves.  It’s to make sure the union can keep funding THEIR sons-a-bitches, in order for them to maintain privileged status over ordinary tax-paying citizens who are tired of more money in education buying less and less in the way of results.

When will you conclude we’ve had enough?  With all the news breaking lately on favored interests getting their way, how much longer do you think we can endure this flagrant abuse of common sense and the true public interest?

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