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The cost of providing teachers’ health care in the United States has risen substantially when compared to private-sector employees. These increased costs have been the focal point of contentious debates in Wisconsin, Ohio and Massachusetts over collective bargaining on public-sector benefits, say Robert Costrell, professor of education reform and economics, and Jeffery Dean, distinguished doctoral fellow, at the University of Arkansas.
Further dissecting the BLS National Compensation Survey (NCS), Costrell and Dean indicate that for single coverage, teachers pay a smaller share than private professionals (13 percent vs. 19 percent), but for family coverage, teachers contribute more to cover the costs of their plan (34 percent vs. 29 percent).
– The NCS data shows that union workers are more likely to participate in medical plans through their employer than nonunion workers and that the employer cost is higher for union workers than for nonunion workers.
– In Wisconsin, which curbed collective bargaining in the public sector, costs have fallen 13 percent to 19 percent, with estimated savings of $2,614 for family coverage and $1,304 for single coverage.
– Fringe benefits, like retirement contributions, Social Security and life insurance, decreased from 51 percent to 43 percent of teachers’ salaries after the collective bargaining changes.
Costrell and Dean suggest that in order to enhance efficiency and lower costs, greater competition for health insurance, higher contributions and increased out-of-pocket expenses might be necessary. They also recommend returning back to more salary-based compensation and increasing the variety of health plans offered to teachers.