Mr. Chairman and Honorable Senators B
Thank you for the opportunity to appear before you. My name is Paul Burrow. I have been a Spanish and Social Studies teacher at Oskaloosa Senior High School for the past 25 years. I also serve as the chair of the Board of Directors of the Iowa State Employee=s Benefits Association (ISEBA), which is a joint effort between the Iowa Association of School Boards and the Iowa State Education Association to provide the best health insurance and other benefits at the lowest possible price for Iowa=s public school employees.
The message I want to bring to you today is that health insurance costs have risen to a level where they are seriously impacting school resources B and are detrimentally affecting the quality of the education our children are receiving.
To understand this, I invite you to go back to the mid-1980's. I was a young negotiator at the time. And, while we dealt with any number of issues, health insurance never came up. In fact, during my first years of negotiating we never even included the cost of health insurance in our discussions. That is ancient history. In the past 7 to 8 years we never begin seriously to negotiate until we know what the increase in health insurance premiums will be. In other words, the cost of health insurance is now controlling negotiations. It's not hard to understand why. Last year the teachers in Oskaloosa effectively took no increase in salary so they could pay for a 19% increase in insurance premiums. This year the rate increase was 35.5%. Just two years ago, family health insurance cost my district just over $5000 per year per teacher. Next year, that insurance will cost my district over $10,000. If health insurance premiums continue to increase at the rate they have been in recent years, by 2008 the family health insurance benefit will cost the district more than a beginning teacher=s salary. Health insurance benefits now account for over 14% of Oskaloosa's school budget. Just three years, those benefits accounted for only 9.5% of our budget. By having to allocate more and more funds to health insurance, this has significantly impacted the ability of our school district to recruit and retain quality teachers and maintain quality programs for our students. And, Oskaloosa is not alone in its struggle to deal with rising health insurance costs. In the Twin Cedars and Nashua School Districts the cost of their family insurance already equals the salary of a beginning teacher. Across the state of Iowa, teachers have for years taken home less pay each year in order to pay for increasing health insurance premiums.
We have attempted to deal with the situation. This is the reason why ISEBA was formed. ISEBA pays 912 cents of every premium dollar for health care claims. It is lean and efficient. But, in an economy that saw less than 4% inflation last year, when we met to set our rates we started with a 15% increase because that is the conservative estimate of what inflation will be in the health care field. When we settled on the increases that would be passed on to our school districts, I made the observation that negotiations were going to be extraordinarily difficult this year. Bill Thompson, the Superintendent of the Williamsburg District, who also serves on ISEBA=s Board of Directors, agreed with me, but also observed that what this really meant was our School Boards would be forced to lay off teachers, and teacher associates; class sizes would increase; the purchase of much needed school supplies would once again be postponed to another year; and ultimately the quality of our children=s education would be shortchanged. He is exactly right. Last year Iowa lost 492 full time teaching positions. The result is fewer opportunities for our students.
Health insurance is a necessity in our society. Many of the people with whom I work are working in the public schools simply because they need health insurance. And, yet, the very thing for which they are working is being priced beyond their reach. Oskaloosa has been forced to shift more cost to employees, and to place a cap on lifetime health insurance benefits. This was done in the hope of somehow putting the brakes on runaway health insurance costs. This scenario was repeated across the state of Iowa B and across this nation. In order to maintain any sort of health insurance, teachers and other school employees are shouldering more and more of the risk and taking home less and less in their paychecks. School Districts across the state and across the nation have had to reduce the number of teachers, nurses, counselors, and support staff in order to pay for the health insurance premiums of their employees. And, because of this, the employees are not the only ones who are shortchanged. The students throughout the United States are the ultimate losers B in a contest in which there seem to be few, if any, winners. Rising health care costs is the single most important factor jeopardizing the ability of school districts to maintain quality educational programs. This situation is not unique to Iowa. During a time of fiscal crises in the states and additional expectations on the schools imposed by the new federal education legislation, the federal government must seek solutions for this problem. Only then will our schools be able to concentrate on the mission of helping all students learn.
