Cap or shift school health benefits

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

Cap or shift school health benefits

Idea 20 : Cap school employee health benefits and/or enroll them in health savings accounts.

Why: Every budget discussion in Lansing and on school boards claims that "everything is on the table" -- with the usual exception of the perks and privileges of government employees -- especially school employees. This is unfair to taxpayers. It shuts off a large source of expenses from cost-saving reforms and efficiencies.

Benefit: The state's Center for Education Performance and Information reports statewide school health insurance expenses of $1.93 billion in 2008. The typical employee share is 5 to 10 percent. Increasing that proportion to the private-sector average of 25 percent would save more than $290 million a year. Even more money could be saved by moving all school employees to high-deductible Health Savings Account plans -- as much as $450 million in the first year and $26 billion through 2021, according to a Mackinac Center for Public Policy analysis. This includes a generous annual school district contribution to the tax-free account owned by each employee.

How: Reduce state school aid by the amount of these savings, pro-rated by district.

Obstacles: The Michigan Education Association union is perhaps the most powerful political lobby in the state and opposes changes to school employee health benefits. The state's largest teachers union also protects its health insurance arm, the Michigan Education Special Services Association, which provides health benefit plans for school districts.

Source: Mackinac Center for Public Policy