At the Butte School District, an employee’s out-of-pocket cost for the health-insurance policy held by most active workers is spiraling upward this summer — by almost $5,000 a year.
“I just don’t know that people truly understand what’s going to be deducted from their checks,” says payroll supervisor Connie Hepola. “It’s terrible; it’s just unbelievable.”
Butte’s not alone, of course. Across the state, employees at scores of school districts covered by the Montana Unified School Trust are looking at paying thousands more for their health coverage. The nonprofit, self-funded insurance pool is raising premiums dramatically to replenish reserves, as it pays for a rash of expensive health care claims.
The huge premium increases are prompting many schools to shop elsewhere for employee health insurance, placing the future of MUST in doubt.
“MUST has union support and has been a very good provider for us,” says Karen Glasser, the human resources director at Kalispell Public Schools, the largest member of MUST. “But to have a 20 percent increase last year and then another 35 percent this year on top of that, is just too much.”
Starting this summer, employees at the Kalispell district will be paying $2,800 more a year for a commonly held policy.
The Kalispell district last week asked other insurers to bid on its health insurance business. At least 70 school districts in the 230-member trust have done the same, private insurance officials and groups say.
Yet whether members of MUST can find lower-priced health insurance offering similar coverage remains to be seen. In some cases, the new prices charged by MUST are bringing its members up to levels that are at the market or just slightly higher.
The Kalispell policy, for example, is increasing 35 percent to $928 per employee a month. Similar policies offered by state government, which has a self-insured pool, cost $800 to $850 a month, and the cost for many districts insured by MUST is much higher.
Districts leaving MUST also have to pay an exit fee of $480 per employee.
Bob Robinson, MUST’s chief executive officer, says losing any one district as a member shouldn’t hurt the pool any more than another. But losing multiple members would make it harder to spread out the risk and keep the pool financially sound, he acknowledges.
The state’s largest school districts — Billings, Missoula, Helena, Bozeman and Great Falls – have employee health insurance through something other than MUST.
Mark Berg, business agent for the Butte Teachers Union, which arranged the health insurance for the Butte district, says the union has asked New West Health Services and Blue Cross and Blue Shield of Montana for quotes, and will consider all options when they see the prices.
“We’re trying the best we can to get some plans that will work for our members,” he said.
The Montana Schools Health & Welfare Plan, a competing health-insurance pool that insures 55 school districts, is charging about $1,340 a month starting July 1 for a fairly generous plan that covers the employee and his or her family.
The cost of a similar plan offered by MUST varies from district to district, but in many cases, is about the same or slightly higher, once the increases take effect later this year.
In most school districts, the school also picks up a portion of the cost — although that’s probably small consolation to school workers facing huge out-of-pocket increases for their health insurance.
In Lewistown, the premium for a MUST policy held by many school employees is increasing from $987 a month to $1,532, to cover the employee and his or her family. The school district covers $558 of the monthly cost for families, so the employee would have to cover the entire $6,500 annual increase in premiums for that policy.
“The increase isn’t affordable for our people, so we have to look for a different alternative,” says district business manager Mike Waterman. “That’s a house payment or car payment right there.”
And at Helmville in Powell County, one of the only two teachers on the MUST health insurance plan at the small K-8 school says she may just drop the coverage all together.
Susan Graveley says she and her husband pay $806 a month for their policy now; the school, which has just 21 students, doesn’t cover any of the costs. This year, the policy’s price is increasing to $1,376 a month, or $6,840 a year.
“We can’t afford to keep it,” she says. “We just don’t know what we’re going to do. And we’re going to have to pay (an exit fee) if we bail out?”
Graveley, 63, who also operates a ranch with her husband, says half-jokingly that if they drop their insurance, she’ll have a standing order not to take her to the doctor if she gets sick.
“I haven’t worked 40 years on my ranch to see health problems take it all,” she says.