Thursday, November 03, 2011

Maine teachers union fighting efforts to break up its health insurance scam

And here's another case (also courtesy of the EAG):


There's been a teachers union insurance scam plaguing Maine public schools for years, and it's been stealing potential savings from taxpayers and students.


Here's how it works:

The Maine Education Association, the state's largest teachers union, established its own insurance entity, the Maine Education Association Benefits Trust, in 1993.


The Benefits Trust "facilitates" the purchase of employee health insurance for Maine's public schools, essentially selling them coverage provided by the state's largest carrier, Anthem Blue Cross/Blue Shield.


Nearly every school district in the state has been lulled into joining this system over the years, according to officials in several districts.


…That kickback accounted for roughly 8 percent of the union's revenue in FY 2010, according to the LM-2 report.


"Clearly (the system) is to (the union's) advantage," said John Russell, human resources manager for the SAD 22 school district, when informed by EAG of the union's insurance kickback. "Unbelievable."


But the arrangement doesn't work so well for public schools. With insurance rates from Benefits Trust/Anthem steadily rising, and school budgets increasingly tight, some administrators would like to take advantage of their legal right to seek competitive bids from other insurance companies.


They believe competitive bidding would drive insurance prices down, like is has in Wisconsin, and allow them to purchase quality coverage for employees at lower rates and reinvest the savings in academic programs.


Benefits Trust allegedly blocks efforts to attract competitive bids by refusing to provide records of recent insurance claims in individual school districts. Asking an insurance company to prepare a competitive bid without reviewing claims history would be like asking a contractor to bid on a demolition project without disclosing the size of the condemned building.


The lack of information essentially blocks out the competition, which may be precisely what the union wants to accomplish.


October 24, 2011


Maine teachers union fighting efforts to break up its health insurance scam


By Ben Velderman
and Steve Gunn
EAG Communications

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