Yes, Georgia’s teachers pay more for health insurance. No, the state shouldn’t pick up more of the tab

Supporters of T.R.A.G.I.C. (Teachers Rally to Advocate for Georgia Insurance Choices) protest outside the state Capitol earlier this year. (AJC Photo / Brant Sanderlin)

Supporters of T.R.A.G.I.C. (Teachers Rally to Advocate for Georgia Insurance Choices) protest outside the state Capitol earlier this year. (AJC Photo / Brant Sanderlin)

Georgia has really expensive health insurance for its teachers compared to teachers in other states. Georgia’s teachers make more money than teachers in those same states.

Both of these statements are true, but only one of them has gotten any attention lately.

Earlier this year, legislators who had grown tired of being blamed for that really expensive health insurance asked for a review of the State Health Benefits Plan to find out why it was, well, really expensive. That study is complete, and it’s being cited by some teachers as evidence that — you guessed it — their health insurance is really expensive.

What the consultants at Aon Hewitt found is that employees covered by the SHBP (for simplicity’s sake, I’m going to refer to them hereafter just as “teachers,” even though many of them are not teachers) pay more for both premiums and out-of-pocket costs than their peers in Florida, Kentucky, Mississippi, South Carolina and Tennessee, as well as those covered by the University System of Georgia’s plan. The total costs, including the employer’s share, are also higher in Georgia, but the consultants also found that almost all of this difference can be explained by geography, demographics, and the number of adults (vs. children) covered by the plan. After adjusting for those factors, the study concluded, Georgia’s total costs “are lower than all but two Comparators, and are 1 percent lower than the mean.” That puts the findings in a rather different light.

As for teachers’ share of the costs, missing from the study is how the salaries of Georgia’s teachers stack up to their peers in other states. I looked up salary data for teachers* in the six states (though not USG employees) reported by the Bureau of Labor Statistics and compared them to the study’s data for how much teachers in each state contribute each month toward their health-insurance premiums. My findings are in these graphs:

The average teacher's income after buying a single health-insurance plan. Sources: Aon Hewitt study, BLS

The average teacher’s income after buying a single health-insurance plan. Sources: Aon Hewitt study, BLS

and

The average teacher's income after buying a family health-insurance plan. Sources: Aon Hewitt study, BLS

The average teacher’s income after buying a family health-insurance plan. Sources: Aon Hewitt study, BLS

As you can see, whether we are talking about plans for single employees or their families, and whether in either case the cheapest or most expensive plan is chosen — in every instance, the average Georgia teacher has more money left over after those contributions than her peers in any of the states Aon Hewitt studied.

Keep in mind, I’ve only taken account here of payroll deductions for the premiums, not out-of-pocket costs, which Aon Hewitt said were also higher in Georgia. However, the after-deduction income for Georgia’s average teacher is $650 to $2,864 more per year than the closest state, depending on which of the four measures you look at. The study put the additional cost at 22 percent higher than average, so if a Georgia teacher’s out-of-pocket spending is more than, say, $3,000 a year, it’s possible that margin would be wiped out. But even then, that Georgia teacher would merely be even with teachers from the second most highly paid state, and still better off than the teachers in the other four states.

The bottom line: There are two separate issues here. First, does the SHBP cost too much overall? The study provides some evidence that’s the case, as well as some suggestions for reducing the cost — from better use of telemedicine and on-site clinics to narrower provider networks. And it may well be true that the state still hasn’t gotten the right mix of plans in its insurance package. If the state can do more to get those things right, it should. (It is worth saying here that I did not look at salary data for SHBP workers other than teachers, nor for retirees. While I tried to look at the aspect of the plan that gets the most scrutiny, this is not an exhaustive review of every covered employee’s situation.)

But the second issue, the claim that Georgia’s teachers are being treated unfairly, seems dubious. Yes, they pay more than teachers in the other studied states, both in absolute dollars and as a percentage of their income. But they also make between 5 percent and 30 percent more money than those teachers, on average. And even after paying more for their health insurance, Georgia’s teachers have more money left over than teachers in other states.

Any measure taken to address the first issue is likely to — and should be intended to — help ease Georgia’s teachers’ financial burden as well as the state’s. But the idea that taxpayers should pick up more of the tab, especially when the average teacher makes almost $10,000 more than the average Georgia worker, just isn’t borne out by the facts.

*I looked only at teachers, from kindergarten through high school, and including career/technical teachers and special-education teachers. I did not look at salary information for other education employees, from librarians to bus drivers, or for workers in other state agencies. Their experience would likely be different: Some better off, some worse off.

(Note: The fourth and fifth paragraphs have been edited for clarity.)

Reader Comments 0

149 comments
LJTCD
LJTCD

The fact of the matter is that two years ago, Governor Deal bankrupted the state employees health insurance account and made a back door agreement with BCBS which skyrocketed our insurance premiums. In addition, we have higher deductibles and out of pocket costs. Many state employees can no longer afford the insurance but don't qualify for Obamacare either. You can argue that teachers make more money in Georgia, but the issue is that 75% of Georgia's new teachers are leaving by their 7th year to go work in other fields. Starting your career at $40,000 and not having an increase for the first three years, while Heath insurance premiums are expensive, is not an incentive to stay teaching. The question remains, do you want to attract and retain good teachers? I say Georgia does not because the politicians want to change education to be run by businesses not the state. Teachers and state workers don't matter to Georgia.

mann23
mann23

Yes, Georgia teachers make more than neighboring cities.  We should be proud of that fact. We should also consider the cost of living into this equation.  We need great schools and outstanding teachers to attract business to Georgia!!!. As a transplant to Atlanta, Georgia many years ago I know that the school systems were a deciding factor in my dad's  decision to transfer to Atlanta for a better career opportunity.  I would say with no doubt in my mind an outstanding school system with the best, and brightest teachers is an even stronger factor these days.  Also, it should be taken into consideration that the state used SHBP’s surplus and never replaced it….we’re talking millions here.  We have a base of over THREE HUNDRED THOUSANDS employees….that alone should make better plans a no brainer.  If you were a businessman wouldn’t you want our business and be willing to negotiate a great deal to get it???

notagain
notagain

If the cost and rate increases are approved by our insurance commissioner,rates will only go up.He can't take time out from attending the insurance conventions to be bothered with reviewing the rate increases.Just approve..

georgiamajik
georgiamajik

No, you did not look at entire picture. Thousands of other school employees were not factored into your research. Many of those dedicated, hardworking folks cannot afford healthcare, yet because they work cannot get other assistance. Don't even mention obama are, cause they can't get that either. Many of them are switching their children to Peach care and doing without insurance in order to feed their families. You must factor in everything to get accurate picture.

LilBarryBailout
LilBarryBailout

@georgiamajik

If they aren't eligible for an employer plan, they most certainly ARE eligible to purchase health insurance from the Obamacare exchange.  Because Obamacare is "working"...haven't you heard?

AvgGeorgian
AvgGeorgian

I Have a question. Let's say DCH coverage costs 1000 per month and state workers pay 400 of that. Who pays the rest ?Does the local school system pay some of that for teachers? Does the state pay all the rest for other state workers? Does that make a difference in the argument?

CatchYaLater
CatchYaLater

Silly me, I thought it was a good thing that our state pays its teachers more than neighboring states. I thought it helped us attract the best and the brightest. Not so much if they're on a sliding scale of higher insurance premiums and deductibles being offset by higher salary!

Bobcat9
Bobcat9

I taught in Georgia for 8 years until I moved to Florida last year.  My pay here is 10K less here because Florida uses a merit pay system.  My monthly healthcare premiums are about 90% covered by the district, which is pretty much the only silver lining about working here.  My concern for Georgia teachers is that, when the state inevitably moves to a merit pay system, teachers will paid a lower salary in addition to already paying more money to healthcare costs. 


Tchr1
Tchr1

@Bobcat9 No, the state will likely cover a higher percentage of the premiums, just like FL.

30097
30097

Thank you for looking into this, Kyle. 

I had heard rumblings over on the newspaper's (supposed) education blog—but correctly dismissed them as just the usual gang of complainers there who daily masquerade as teachers.

LilBarryBailout
LilBarryBailout

No, the state shouldn't pick up more of the tab

---------

The state doesn't pick up anyone's tab.  Tax payers do.

Greedy teachers currently enjoying their three-month vacation can't get enough of other people's money.

Wascatlady
Wascatlady

The question is, Kyle, why aren't the teachers getting the same deal as USGa employees?  Why hasn't the DCH used its considerable buying power to get a better deal? 


Follow the money.

OriginalProf
OriginalProf

@Wascatlady 

I think I can tell you. State teachers have a health plan that was devised by state politicians. USG employees have one that was devised by their Board of Regents.  Big difference!

MHSmith
MHSmith

@Wascatlady Better question is why hasn't MEDICARE been given authority from Congress to negotiate prices?  

Wascatlady
Wascatlady

Average teacher income does not tell the story, as it does not compare apples to apples.  Look at pay schedules rather than averages, which take into account a more seasoned (experienced) and more educated (Degrees obtained) workforce here in Georgia.

Wrecker
Wrecker

As many have pointed out, this simple approach to the issue does not tell the whole story and, therefore, is not worth much.  It is an error to omit many low-level, poorly-paid non-teachers and many high-level, handsomely-paid administrators and assume they would balance out.  It is an error to use states as comparators that have wildly different costs of living, which could account for much of the difference in salaries, without some adjustment.  Likewise, it is error to fail to account for differences in healthcare availability and prices in the various state.  This article seems designed to chastise the teachers for daring to complain about their healthcare costs, rather than reporting on the issue.  

ajcreadernorthgeorgia
ajcreadernorthgeorgia

The visits home to say hello to Mom should be fun, since she is a retired teacher. Turkey dinner might not be so festive this year.

Renteroo
Renteroo

"The optimal solution is to lower the total cost of their insurance, saving teachers and the state money."


The country is ready for this change, whenever the GOP decides it is as well. Of course, the GOP will never entertain meaningful improvements to the ACA, so stuck are they in the "repeal! Repeal!! REPEAL!!!" meme.

MHSmith
MHSmith

@Wena Mow Masipa How


The optimal solution is to lower the total insurance costs for everyone. The Republicans will never repeal the ACA and they have no reasonable alternative to it nor do any of them desire to have one. 


I've read two of the GOP top contenders remarks about restoring doctor patient relationships by repealing the ACA... news flash:


I never lost my choice of doctors or broke any relationships established with any of them.  


Unfortunately, Herman Cain, everyone can't afford to fly out to Texas and receive the very best possible treatments for their stage four cancers at the number one cancer treatment center in the nation and have MD Anderson's best hematologists and oncologists cure us.


Stop lying Republicans!


If I trusted you with my healthcare treatments and insurance coverage GOP, I would've gone bankrupt in less than a week after my diagnosis and been dead as of 2 years ago. 


Thanks to the ACA, Gwinnett Medical Center (Lawrenceville and Duluth), the best doctors, surgeons hematologist and oncologist east of MD Anderson.    


God bless them all. 

high-school-teacher
high-school-teacher

I looked online at a cost of living calculator and entered a base salary of $50,000 for Georgia. When I looked up cities in the other states (capital cities and tourist/large area cities), I found that all of them had a lower cost of living than Atlanta (even West Palm Beach, FL). Most of them were about $5,000 less, with West Palm being $1700 less.


Another interesting statistic to note is the difference in average salary and starting salary. A first year teacher makes around $33,000 in GA, whereas the average salary is around $52,000. The average is skewed by those who hold advanced degrees and who have been teaching 21 years or more (the salary scale stops at 21 years). Health insurance premiums are the same for every teacher, however.


Another interesting statistic is to compare the increase in healthcare over the last 7 years with the decrease in teacher salary over the last 7 years.


As a teacher, I'm not necessarily complaining that I have to pay more for insurance than others; I know better and am grateful that I have decent insurance. I am questioning why our premiums have skyrocketed yet our coverage has dwindled. In a 10 year time period, we went from a $200 copay for a hospital stay to a $4,000 deductible plus 20% (under the HMO plan). Prescriptions that were a $20 copay now are as high as $90. Additionally, our premium has doubled. Why the huge increase, especially when there are 650,000 employees in the state of Georgia included in the SHBP? I was under the impression that larger businesses could get better insurance since they had a higher number of employees. 

Wascatlady
Wascatlady

@high-school-teacher There has been no effort to be sure Georgia teachers got the best deal.  Any surplus will just be raided again to pay for "budget shortfalls" in the state, and to pay for more tax breaks for the wealthy!

LilBarryBailout
LilBarryBailout

@high-school-teacher

Your premiums have skyrocketed and your coverage has dwindled because you're now subsidizing a whole lot more people's health care than you did before Obamacare.

steveatl
steveatl

I don't think you considered that the cost of living is higher here in GA than the other Southern states, or did I miss something there?

HIbought theRefs
HIbought theRefs

I'd like to also see the comparison of which of these states ranks higher than GA in achievement measures.  Because really, wouldn't we rather attract the best/brightest teachers to our state and improve educational outcomes, or just stay mired at the bottom of the pack?  Frankly, comparison to states with lower achievement is not the best criteria for evaluating what to pay (or the healthcare costs to those teachers).  Let's look at some states with high student performance and see what those salary and healthcare costs look like then!

Tchr1
Tchr1

@AWA1 That would be an apples to oranges comparison.

LilBarryBailout
LilBarryBailout

Georgia should just put all teachers and other employees on Obamacare.  It's free.

Kyle_Wingfield
Kyle_Wingfield moderator

@LilBarryBailout Actually, a single "bronze" plan on the Obamacare exchange would most likely cost the average teacher more than a single plan on the SBHP. (Kind of hard to do comparisons with more than one person involved.)

Poidawg
Poidawg

No LilBarryBailout, the ACA is not "free", despite whatever right wing media says about it. It is still part of the market place, it simply allows people to buy in as part of a"group", with some people getting subsidized by the government to enable them to participate. Until you understand that, there is no point getting into a discussion.

PITTFAN
PITTFAN

@Poidawg 

There are so many untruths in your statement I don't even know where to begin.

MHSmith
MHSmith

@Kyle_Wingfield @LilBarryBailout


Exactly. So Kyle, that means the subsidies being given are better for one group of people than to another group. First thing wrong isn't the ACA subsidies,(which are low comparatively) it's all the larger subsidies that are given to others in whatever form it is given: Tax write offs, large subsidy payments to insurers, HSAs' or highly subsidized employer sponsored plan. Make all subsidies the same based on income for single and families.      


Do away with differing forms of subsidy. Everyone who receives a healthcare subsidy from the government has to apply under the same program or they get no subsidy of any kind from the taxpayers. No more health care tax write-offs, HSAs' (in yearly limited amounts) only when buying Bronze or Silver ACA plans or market equivalent insurance plans. No more employer sponsored health insurance. 



No more Cadillac plans for some and Smart car plans for others.  

LilBarryBailout
LilBarryBailout

@Poidawg

By "some people getting subsidized" you mean "85% of Obamacare cases getting handouts from tax payers".

FIFY

Mandingo
Mandingo

I agree with you on this one Kyle. Teachers earn way more than the average state employee. They are paid based on degrees and years of experience and not on results achieved in their classrooms. I am certain if you did an analysis on state employees that are not teachers you would find that those employees are being crushed under the current health plan. Be that as it may.You argue that a teacher that makes more money can pay more money for services rendered on one hand. But if the conversation shifted to higher income earners paying higher taxes and/or  higher tax rates for government services rendered you would argue like hell the other way and claim it was an unfair burden on the high income earner.

LilBarryBailout
LilBarryBailout

@Mandingo

High income earners are already paying their share plus that of one or more other people who are paying zip or close to it.  You've already got your wish on that score, so asking even more would just be greedy.

ILoveToWrite81
ILoveToWrite81

@Mandingo Why should someone pay higher taxes just because they make more money? If I were making a lot of money and EARNED that money, I should continue to pay whatever percentage my neighbor is paying, which probably still equals paying more in taxes anyways. Making more money shouldn't equate to giving more money back to the government. Let the rich guy pay his portion and put the rest of that money back into our economy --- buy a boat, buy groceries, fund a strip club, I don't care!

DawgNole
DawgNole

@Lindsaii78 @Mandingo

BINGO!

If income has been EARNED through years of diligent study/hard work, why should the beneficiary of that income be punished with a higher tax rate?!

AvgGeorgian
AvgGeorgian

@DawgNole @Lindsaii78 @Mandingo I have given this some thought. i have deduced that wealthier people on average gain a larger government benefit from their wealth. Here's an example - 


What’s important to note is that if you are in the top tax bracket, you get 39.6 cents back for every one dollar in interest you pay on your mortgage. - See more at: http://www.financialsamurai.com/maximum-mortgage-tax-deduction-depends-on-income/#sthash.PuLwDAow.dpuf


Wealthy people get to buy a valuable asset with government funded tax break


http://www.financialsamurai.com/maximum-mortgage-tax-deduction-depends-on-income/