More than 200 Montana school districts are facing health-insurance increases averaging 39 percent this summer, as the nonprofit trust that insures their employees is in financial straits.

The Montana Unified School Trust, a self-insured pool that covers 230 school districts and related organizations, has seen its reserves plummet 75 percent since mid-2007, as health care claims have outstripped projections by millions of dollars, its Chief Executive Officer Bob Robinson said this week.

Robinson said the trust will have a $3 million to $4 million potential shortfall by mid-year, so it must raise health-insurance rates for its members to help erase that deficit over two years.

“The bottom line is an increase in health care costs and a dramatic escalation of those in the last two years,” Robinson said. “We think we’ve set rates that are proper for the risk.”

The increases come also as Montana school districts are looking at little or no increased funding from the state in 2011, because of a grim state budget outlook.

“It’s just a terrible time for it to happen, with everything else going on,” said Lance Melton, executive director of the Montana School Boards Association. “It just exacerbates the cuts that school districts will have to make over the coming years.”

The trust, known by its acronym MUST, is overseen by a board of teachers, school administrators and school trustees. Its insurance covers 19,000 people who either work for or are dependents of employees at mostly small and mid-sized school districts.

Its largest member school districts are Butte and Kalispell, whose health-insurance premiums under MUST will increase 49 percent and 35 percent this year, respectively. Average premium increases for some

member districts are as high as 74 percent, and increases for specific policies can be even higher.

For example, at Nashua schools in northeastern Montana, employees with coverage for their entire family will see an increase from $534 a month to $978, or 83 percent. The school district covers $364 a month of the policy’s cost.

“We’re looking at other options,” said Nashua schools secretary Bobbi Skyverg.

In contrast, another group that manages coverage for 55 school districts, Montana Schools Health & Welfare Plan, increased its member premiums 11.9 percent this year.

School districts in Billings, Missoula, Helena and Great Falls either are self-insured or buy their own policy for the district.

The increases for MUST members take effect in July or September, depending on when the school joined the plan.

MUST kept premium increases quite low from 2005-2008, because board members felt the trust’s financial reserves were healthy and they didn’t want to overcharge members to increase reserves past a certain point, Robinson said.

But starting in 2007, high-cost medical claims began occurring in much greater numbers, and continue today, he said.

Single cases costing more than $50,000 rose from 107 in fiscal 2007 to 150 in 2008, and then 183 in 2009. The trust’s reserves topped out at nearly $19 million in mid-2007 but have fallen to $5 million.

Last calendar year, the trust posted losses of $9.5 million.

In an effort to save costs, MUST in February decided to hire a new company to administer its claims, First Choice Health of Seattle. Robinson said the new company will save the trust at least $600,000 a year on administrative costs and offer “case management” services to control costs.

Yet an executive with the trust’s prior administrative contractor, Allegiance Benefit Plan Management of Missoula, said Thursday those projected administrative savings are “totally illusory,” and questioned whether First Choice can offer MUST members an equivalent network of health care providers.

“We manage health benefits for 120,000 people and 80 percent of those are in Montana,” said Ron Dewsnup, general manager and president for Allegiance. “(First Choice) doesn’t have the reputation or the volume of business to be able to maintain the same number of contracts.”

Dewsnup said Allegiance terminated its contract with MUST as of June 1 because it believes MUST is in “serious financial trouble” and doesn’t want its own reputation damaged by any potential fallout.

Robinson said data provided by First Choice show it will clearly save the trust money and offer a sound network of providers.

However, MUST is concerned about losing members to competitors, as school districts looking at huge rate increases inevitably are shopping around, Robinson said.

“They are not happy with the rate increases they’re seeing,” he said. “It’s a very, very difficult time.”

Blue Cross/Blue Shield of Montana, the state’s largest private health insurer, has been hearing from MUST members, company spokesman Tim Warner said Thursday, and is directing them to the Montana Schools Health and Welfare Fund, which Blue Cross insures. The fund insures 55 school districts now.

“We anticipate some growth,” Warner said.

(11) comments


As if this WAS NOT EXPECTED after the congress gave us the biggest ponzi scheme in the history of the world with obamacare.

Between John Deere and Catepillar they are facing $250 Million more in outlays they did not project for in their operating budgets because of the increases in taxes for obamacare.

Anyone care to guess how they will deal with this? If you think they "are not" going to reduce the number of employees they employ you'd be "wrong". Employees and their wages are the biggest expense businesses have, so the first logical step will be to begin another round of layoffs to balance their operating budgets. So say HELLO to much higher unemployment and less tax revenue being collected - in short, our economy is likely to collapse under the weight of the the out of control federal spending. In a recent poll "79 percent" of those polled believe that the our economy is on the verge of collapse.

Anyone wanna bet who KING OBAMA will blame?


Don't think obamacare is SOCIALIZED HEALTHCARE, look, see, and read the praise from a banana republic dictator who is "giddy" about obamacare just like obama and congressional dems and libs;


Sounds like the perfect time for a 2 year wage freeze and the elimination of the teacher's pension plan. Move them to a 401K system like the rest of us are on.

39%...huh, I know it's a good idea to start high in negotiations but this is ridiculous.


This according to the CBO.

Okay dems and libs tell us again how FISCALLY responsible obama is.

Under obama our debt will wind up being a whopping ""90 percent"" of our GDP.


Remember how dems and libs ranted and raved about gas prices when G.W. was in office?

How come those same dems and libs aren't ranting and raving now. The price of gas has steadily gone up in the past few months and not a peep. We could well find the price of gas hitting or exceeding the $3.00 per for gas and you can bet the dems and libs will remain as quiet as church mice and not blame KING OBAMA like they blamed G.W.


dear purple:

i was going to look at the link you provided, but you must have copied it took me to fox news, which we all know doesn't count


Let me get this straight - MUST is basically an insurance company. That insurance company had costs that exceeded it's revenues (Claims exceeded premiums) by $6.5 million. MUST has notified the teachers in it's plan that in order to make up this deficit they will be raising the teachers' premiums by 39% next. Your solution is to freeze their pay and do away with their retirement plan too?

Darth Vader

I will take King Obama over King George. Speaking of utter failures and terrible leadership. There was a good show on PBS last night about Racicot, Enron and deregulation in Montana.


@STY- Here's another link via The Drudge Report, which will then put you through. This link is direct though.


whatthe- MUST is an organization, who decided that they didn't want to pay insurance premiums and self-funded instead.
Someone or multiple someones under their plan gets major med bills and- they've got to figure out a way to cover it on their own.


[durth vader]How many terrorist attacks have happened after 9/11 under G.W.? ZEROYou consider PBS a credible source????? PBS and NPR are both taxpayer funded and both are controlled by liberals, so anything they show will be leaning to the left. Did Racicot deregulate Montana by himself? How about DEMOCRATS in the state legislature voted in favor of deregulation!ENRON, did it happen overnight? Not hardly -- the corruption was ongoing during the entire 8 years Billy Clinton was in office, it just happened to collapse under G.W. Since it was an ongoing problem under Clinton how come he never did anything?You're probably in that group of fruitloopers on the left who actually believe that 9/11 was an inside job, that G.W. knew about it beforehand and did nothing to prevent it, right?

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