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For Immediate Release

Date: 06/09/11

Bill Regarding Insurance for School Districts Clears House

AUGUSTA - Maine school districts could get the information needed to explore self-insurance options under a bill passed by the House yesterday on an 81-65 bipartisan vote. The measure now goes to the Senate and would have to come back to the House at least one more time.

State Rep. Ralph Sarty (R-Denmark), the sponsor of LD 1326, said the bill gives school districts the flexibility to self-insure or find more affordable plans. "Schools should have the option to obtain less costly health insurance policies during this time of financial pressure," he said. "The bill does not mandate anything. School districts can stay with the coverage they have, or they can look around for a better deal."

The legislation - "An Act To Allow School Administrative Units the Option To Seek Less Expensive Health Insurance Alternatives" - entitles school districts to obtain claims data from the Maine Education Association Benefits Trust (MEA Trust). This is the entity that handles health insurance for all but a handful of school districts in Maine.

"Access to the claims data is the key," said State Rep. Jonathan McKane (R-Newcastle), who has worked with Rep. Sarty in generating support for the bill. "Right now, school boards cannot obtain competitive bids because the MEA Trust will not release the necessary claims data. This bill requires insurers, HMOs and other organizations to provide information concerning a school unit's claims history."

The legislation has strong support from the Maine School Management Association, representing the Maine School Boards Association and the Maine School Superintendents Association. Health insurance consumes up to 14 percent of school district budgets, according to a fact sheet provided by the School Boards Association.

A letter to Rep. Sarty from the chair of the board of directors for the Bonnie Eagle School District, MSAD 6, said the bill would provide a valuable tool. "As funds for education diminish, we must look for ways to control costs and apply the savings to educate our students," the letter stated. "The passage of LD 1326 would mean school districts could gather and analyze data about health benefit packages for employees and possibly realize substantial cost reductions for the same or similar coverage."

Rep. Sarty said he has been contacted by 27 school superintendents regarding the bill. "School administrators are seeking options," he said. "They are not satisfied with the current one-contract arrangement through the Maine Education Association and Anthem. Many of them believe they could get more reasonable rates, as well as an expanded range of options, by self-insuring. The Maine Municipal Association plan, for example, offers five different choices with varying benefits and premium costs."

The measure stipulates that any self-insurance plan covering school units would have to adhere to traditional insurance standards with regard to financial reserves, actuarial analysis and legal technicalities

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Contact:
Jay Finegan
Maine House Republicans
Tel: (207) 287-1445