Pool health benefits of public employees

The Detroit News is highlighting ideas from various groups to promote discussion on reform, restructuring government and the economy.

Pool health benefits of public employees

Idea: Consolidate health care coverage for all public employees in Michigan in a single insurance pool.

Why: Rising health care costs are eating into school and municipal budgets. Creating a health insurance pool for all public employees might save money by cutting administrative costs and providing a larger number of customers to negotiate lower rates. A compromise in the 2007 budget bill made it easier for school districts and local governments to voluntarily form health insurance pools. Not one new pool has been created.

Benefit: House Speaker Andy Dillon, D-Redford Township, put out a white paper estimating that pooling health insurance would save up to $900 million a year. A 2005 estimate by the American Federation of Teachers and International Union of Operating Engineers projected the savings for school districts only at $156 million to $223 million a year or a 7 percent savings. Applying the 7 percent savings across all government and school employees amounts to more than $500 million a year. That money could compensate for possible state aid cuts or be plowed back into the classroom.

How: Pass a state law requiring public employees into a single health insurance pool.

Obstacle: Public-sector unions oppose the move, saying the pool inevitably would lead to fewer choices and more expensive health benefits. The Michigan Education Association, the state's largest teachers and school employee union, already runs its own health insurance pool through the Michigan Education Special Services Association, which covers more than half of public school and community college employees.

Sources: Center for Michigan

and House Speaker Andy Dillon