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Legislators study teacher insurance

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Rising insurance premiums eat at potential teacher pay raises, and lawmakers want to address the problem.

The legislative Education Interim Committee began studying the issue Wednesday. So far, there's no agreement on the solution.

In Utah, premiums shot up about 17 percent between 1995 and 2000, mirroring a national trend, according to legislative research.

Reasons include aging and rising prescription costs — from $50 billion in 1993 to an estimated $240 billion by 2004.

To make up for increases, Utah school districts have transferred costs to employees and shrunk benefits and raises.

Consider: As of early July, average teacher raises hovered around 4.75 percent, and partly because of rising insurance premiums some districts are struggling to come up with even 2 percent raises.

Some teachers worry about the future.

Premiums are expected to increase at 8 percent to 10 percent annually in the next few years, and pharmaceuticals could jump 300 percent in the next 10, the American Federation of Teachers reported.

"The price and quality of our health insurance is an outrage," said Valerie Scott, a Washington School District bus driver. "We are basically being asked to work for health insurance only."

The AFT suggests a law to allow school workers into the state employee insurance pool. That way, smaller districts especially could negotiate better and less expensive insurance plans. The option would be voluntary.

But Utah Education Association Executive Director Susan Kuziak fears doing so would stifle competition and local choice because the state would dictate benefits to teachers.

Joining insurance pools also can result in those in the larger pool subsidizing newcomers who don't change benefits packages, said Kelly Atkinson of the Utah Health Insurance Association.

Granite Superintendent Stephen Ronnenkamp recommended joining the pools and giving school districts state money to help offset premium increases.

Sen. Howard Stephenson, R-Draper, mentioned medical savings accounts, presented last year by Don Ruzicka, owner of Medisave Account Management and husband of Eagle Forum President Gayle Ruzicka.

Employers buy less expensive, high-deductible health insurance and put the money they save from it in separate employee funds. If employees stay well all year, they receive their fund's largesse.

Insurance executives, including those at the Public Employees Health Program, have examined the concept, but found some downsides. The idea disadvantages older clients, and large businesses face tax law barriers.

E-mail: jtcook@desnews.com