There are numerous insurance carriers capable of insuring a school district. However, because many school districts have yet to name themselves the policyholders of their own insurance policies, they lack the claims data that many carriers need to competitively bid. As discussed in Section IX, making sure that such claims data become available to the district should be a top priority. The Michigan Legislature has also recently been looking into helping school districts obtain claims data to enable them to solicit more accurate bids.
Even if a district does not have claims data, some insurance carriers or health maintenance organizations are capable of utilizing existing personnel census data, such as age, to create a quote. However, without claims experience, a carrier may deliberately have to increase its bid to compensate for the uncertainty that arises from the lack of data. Moreover, should a carrier guess wrong, future increases could prove to be more than anticipated in future budgets. Nevertheless, competitive bidding is possible so long as the school district is careful to protect itself from future uncertainty. It is also important, in comparing quotes, to ensure that plan comparisons are competently performed.
The savings obtained by utilizing independent plans could be substantial. In August 2005, the Lakeview Public Schools in Macomb County stated that switching its teachers and paraprofessionals from MESSA to Blue Cross PPO would save the 2,963-student school district $500,000 a year.
Jeff Steinport: "We actually did some district pooling for nonbargaining employees. In Kent County, we have had for about three years an insurance pool for administrators. Either self-insurance or pooling; I would probably support a law to demand that schools bid out insurance, because it’s a huge cost. … They have to bid out copier paper, so why shouldn’t they have to bid out insurance?"
Sandra Feeley Myrand: "We got our MESSA rates during the summer of 2005; we still had both Super Care and the PPO Choices. And our Super Care went up 14.8 percent, and our Choices went up 18.5 percent, but our Blue Cross went up 7.8 percent. There is not that much difference in coverage or the experiences of the employees to account for that range of difference."
Care Choices HMO, according to a press release issued by Decision Resources Inc., "appears poised to take some educator’s health business away from the Michigan Education Special Services Association (MESSA)." " ‘You can see how MESSA is vulnerable to competitors,’ said Rick Byrne, HealthLeaders-Interstudy analyst. ‘They’re looking for 10 to 12 percent premium increases, while Blue Cross Blue Shield of Michigan, the company its network is built upon, is publicizing its smallest premium increases in a decade.’ "
In Holland, the school board at impasse imposed a choice of two plans provided by Blue Cross for about $13,000 per year per teacher. Previously, Holland teachers had been covered by MESSA at a cost of more than $15,000 per year per teacher.
In Pinckney, it was reported that schools could save up to $800,000 annually as a result of the district’s teachers and administrators switching from MESSA Choices II PPO to the Blue Cross Blue Shield Flexible Blue PPO. Gloria Sanch, Pinckney Education Association chief negotiator, commented: "That was tough for some of our members, but we understand the great need to save money. Most of our teachers thought this was fair."