MTEA proposes teachers contribute to health insurance

Last week, the teachers' union proposed that teachers pay a portion of health insurance premiums. This represents something of a breakthrough, since the union has always resisted any teacher contribution. That said, it does not appear that the union proposal would create any incentive to hold down costs, since the payment would simply be a percentage of salary. There appears to be no reward for the teacher who chooses a less expensive policy or one who avoids unnecessary procedures.

(When I was on the Milwaukee school board I would meet for breakfast with Sam Carmen, the MTEA's executive director. I argued that the primary reason for teacher contributions was not cost shifting but creating incentives to reduce costs and that it made sense for teachers to share the benefits of any savings. This led to a union proposal for a revised insurance plan which the union believed would save money. The union proposed that any savings would be shared by MPS and the teachers. MPS agreed to this proposal. Unfortunately for this story, there were no savings.)

The MTEA also proposed getting rid of the supplemental retirement plan, but apparently only for new employees, in exchange for relazing the residency requirement. While getting rid of the plan seems a very good thing, by restricting the proposal to new employees, the immediate savings are likely small. It could also create two classes of employees, causing resentment in the future. If the present value of the current teachers' rights to the supplemental pension could be calculated, it would seem preferable to buy out those rights and reduce the need for future contributions.