Some Hawaii teachers’ health insurance premiums are going up as much as 100 percent or more, union leaders say, thanks to the new contract imposed on them by the state.
According to a Civil Beat analysis, the answer is yes.
Here’s the fine print, though: While the new rates for some teachers are indeed a jump from what they paid in June, they’re not that far off what those same teachers were paying in January. OK. I know that might sound confusing. But read on and I’ll explain.
“The State is pretending that raising our share of health care costs from 40% to 50% is equal to other workers,” he wrote in a memo to union members last week. “The fact is teachers will pay higher out-of-pocket costs than any other group and an increase for many of 100% or more.”
Also true. For some, their new payment is a 15 percent increase in the amount they were paying out of pocket in June, but others will be paying up to 109 percent more each month.
Here’s how that’s possible.
Teachers have a variety of health insurance plan options, which were first offered to them under their own Voluntary Employee Benefits Trust (VEBA) established in 2006. The VEBA was separate from the Hawaii Employer-Union Health Benefits Trust (EUTF). Because it served only teachers, a population healthier than the general government worker population, VEBA’s premiums were lower than those offered by EUTF.
But last year, the law allowing teachers to have their own trust for insurance plans was repealed. In January this year teachers had to switch from VEBA to Hawaii’s trust for all government employees. 1
Shortly after the transition though, EUTF cut the rates for one of the three health plans almost in half. The price of the HMSA 80/20 plan (formerly HMA 80/20 under VEBA) went from $138 to $75 per month for an individual plan.
As of July 1, new much higher rates went into effect. The new monthly teacher contribution for an individual HMSA 80/20 plan is $155. That’s a 105 percent increase.
(See the chart above for the rate increases.)
Who Pays Most Out Of Pocket?
So which state employees are paying the most for health insurance premiums?
Despite what Okabe wrote in his memo, even with the increases, it’s not necessarily HSTA members.
First, it’s important to note that EUTF designated special health plans to replicate teachers’ options under VEBA. These plans are not available to the general government employee populace — only teachers.
It is virtually impossible to compare, then, what teachers are paying out of pocket for their health care premiums, when the benefits are not directly comparable to those for other employees.
Second, EUTF also offered teachers something VEBA never did: two-person health plans. VEBA only had “self” and “family” options. So in theory, at least some teachers were able to downgrade from the family plan to the new and less less costly two-person plan.
The good news is that if teachers find the premiums under their designated plans too burdensome, they may switch to any of the EUTF’s eight other health plan offerings. But once they leave their VEBA-equivalent plans, teachers will never be able to return to them.
Bottom Line: The president of the teachers union is correct. Some teachers are paying dramatically more for health insurance under the new contract.
Teachers were so unhappy about the transition to EUTF that some filed a class-action lawsuit against the state in September. The state liquidated the $4 million VEBA had stashed away since it was established in 2006. The program saved the state and teachers money, because teachers’ premiums under VEBA were relatively low. Health insurance costs are based on how much the plans are used, and most teachers are generally healthy people who don’t need a lot of doctor’s visits and prescription drugs. ↩
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