Michigan Taxpayers Spend $2 Billion for Teachers’ Health Care

Published May 31, 2016

With taxpayer funding for health care entitlements an issue of national controversy, a new database unveiled by the Mackinac Center for Public Policy, a nonprofit think tank based in Michigan, shows some Michigan public school teachers don’t contribute a single penny toward the cost of their health care premiums.

The data for the system was gathered through a survey of Michigan school districts’ monthly health insurance costs for the 2008-2009 school year. It contains information on more than 95 percent of the 551 school districts in Michigan.

Taxpayers Footing the Bill

Michael Van Beek, director of education policy at the Mackinac Center, said the database showed Michigan public school teachers pay less than 5 percent of the cost of their health benefits, as opposed to an average of 22 percent of their premium for all other Michigan residents.

“According to data provided by schools, 52 percent of Michigan school districts have at least some teachers that do not make any contribution to the cost of their own health insurance premiums,” Van Beek said.

The database reveals school employee health insurance in Michigan is not a competitive market, Van Beek notes. A full 88 percent of the state’s school districts use the Michigan Education Special Services Association, a third-party insurance administrator affiliated with the Michigan Education Association, and Blue Cross Blue Shield of Michigan underwrites more than 90 percent of other school employees.

Recommends HSAs

Van Beek believes consumer-focused reforms could save the state and taxpayers money, and he says the information in this database should be a motivator for reducing costs.

“The database will assist school officials as they seek to reduce their costs, by allowing them access to the plans and costs of nearby and similar districts,” Van Beek said. “Districts that are effectively controlling their costs stand out in the database, and school officials can identify these districts and begin to explore whether these cost-saving strategies would work for them.”

The Mackinac Center estimates moving all school employees into a state-run high-deductible Health Savings Account plan would save the state $451 million in the first year and roughly $26 billion over the next decade.

‘Taxpayers Deserve to Know’

Oakridge School Superintendent Tom Livezey argues teachers deserve these benefits.

“I worked hard to get what I got,” Livezey told the Muskegon Chronicle. “I chose this profession…. If they want this then get into this profession.”

Van Beek thinks it’s important for the public to have access to such information, however, to be able to judge whether this level of taxpayer support is fair.

“School employee health insurance costs have increased in real terms by 86 percent since 1995, and Michigan currently spends $1,200 per pupil to provide employee insurance,” Van Beek said. “Taxpayers deserve to know how this money is being spent.”

Sarah McIntosh ([email protected]) teaches constitutional law and American politics at Wichita State University in Kansas.

Internet Info:

The Michigan School District Health Insurance Database: http://www.michiganschooldatabases.org/