The old system gave WEAC’s favorite insurance company an unfair advantage
It would be foolish to allow a simple error to cloud the truth about WEA Trust insurance.
The Wisconsin Republican Party apparently goofed when it recently issued a press release, claiming the Marshfield school district saved $850,000 by switching away from WEA Trust, an insurance carrier established by the Wisconsin Education Association Council, the state’s largest teachers union.
WEA Trust quickly jumped on the error, pointing out that the Marshfield district, as well as several others, have switched from other carriers to WEA Trust in recent months and saved money, according to a report posted by madison.com.
But let’s not forget the recent past.
Until Gov. Walker’s budget repair law took the topic of school employee health insurance off the collective bargaining table, local WEAC-affiliated unions frequently insisted on WEA Trust coverage, which came at a highly-inflated price.
Last year EAG issued a report titled “A Crucial Challenge for Wisconsin Schools: Escaping the Shackles of WEA Trust.” The report found that 43 of the 50 districts with the most expensive insurance premiums purchased coverage from WEA Trust. On the flip side, 49 of the 50 districts with the least expensive premiums contracted with other companies.
The average monthly premium for single-employee coverage was $734 for schools with WEA Trust, and $614 for schools that contracted with other companies.
Schools were paying dearly for WEA Trust coverage, at a time when they could least afford it. But their unions insisted on having it.
Under the new law the unions have no power to advocate for WEA Trust, and school boards are free to shop the open market for coverage. That has prompted more insurance companies to enter into the bidding, which has driven down costs.
That means WEA Trust has been forced to significantly lower its prices to remain competitive. A good example is the Appleton district, where the school board recently invited four companies to bid for its business after years of coverage through WEA Trust, according to TheNorthwestern.com.
Before the law changed, WEA Trust offered the district a two percent reduction in annual premiums for the coming fiscal year. When competition was introduced, WEA Trust changed its bid to an 11 pecent reduction, according to theNorthwestern.com. The school board chose to remain with the union-affiliated insurance company, at a savings of more than $3 million per year.
That means the budget repair law helped the school save money. Without competition, WEA Trust would have continued to bleed Appleton and other school districts for every penny it could pry from them.
If insurance were still a topic of collective bargaining, there would be far less competiton and fewer dollars saved.
The changes in collective bargaining laws have forced WEA Trust to lower its rates and compete on a level playing field with other insurance carriers. WEA Trust no longer has an unfair advantage in the martketplace, a fact that has already saved school districts millions of dollars.
For years people have been screaming about the unfairness of the WEA Trust monopoly, and the disgraceful amount of money it cost schools and taxpayers. Finally new laws are giving school boards the power to choose the best insurance deal for their districts.
-###-
