HARRISBURG, July 27 – State Rep. David Kessler, D-Berks, the prime sponsor of the bill, and Rep. Bernie O’Neill, R-Bucks, are working in a bipartisan fashion on a bill that could lead to major savings and cost containment in school budgets.

The bill (H.B. 1881), introduced last week, is designed to bring together most public school teachers and other school employees in Pennsylvania in a statewide health benefits plan to maximize purchasing power with insurance companies. Kessler said such a plan could save Pennsylvania hundreds of millions of dollars and lower property taxes and contain costs in the long term. The bill has more than 70 bipartisan co-sponsors.

“When large health-care purchasers like Lowe’s or Best Buy with tens of thousands of employees go to health insurers like Blue Cross or Aetna, they get a significant discount. We should secure that same group buying power with insurance companies for teachers and other school employees so we can save tax dollars. Health-care costs have risen faster than general inflation for years, and this is a way we can optimize health benefits and save substantial money at the same time,” Kessler said.

O’Neill said, “This is one of the biggest things we can do to make better use of our education dollars at the state and local level. This would also be a major advance in holding down property taxes, and it would remove one of the biggest obstacles in school boards’ contract negotiations with employees.”

A 2004 study by a nonpartisan legislative agency said a statewide purchasing plan would save hundreds of millions of dollars. A one-page summary of the report is available here. House Bill 1881 would create a Public School Employees’ Benefit Board comprised of representatives from state government, local school boards and school employees. The board’s first responsibility would be to update the study by examining the way health benefits are currently delivered in school districts.

Depending on the study results, the board would have the option of designing and implementing a statewide health benefits purchasing plan for school employees, or implementing an alternative plan to lower health benefits costs, such as encouraging best practices or helping school districts consolidate certain aspects of their current plans, such as prescriptions. If the board chose a statewide purchasing plan, it would still have the flexibility to design a plan that ensures uniform, quality coverage for teachers and other school employees while recognizing regional differences in cost and other factors. School districts would enter the statewide plan as their current contracts expire.

Between 2003 and 2005, the cost of providing health coverage to employees rose by 24 percent in Pennsylvania school districts. School districts currently pay about $1.5 billion a year on employee health care, approximately $1 out of every $6 collected in school property taxes.

The bill has been referred to the House Appropriations Committee for consideration.