Main Street Journal: Online Exclusive: Joe Saino: Health Care Costs of the Two School Systems

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Health Care Costs of the Two School Systems
By: Joe Saino

There are a number of differences between the Memphis City Schools (MCS) and the Shelby County Schools (SCS). Merging the two systems is going to be difficult. Health care costs for active and retired employees are one major cost item that I have been exploring. Talk about getting into the weeds, in health care the weeds are shoulder high.

I have been investigating health care costs for some time at the City of Memphis, Shelby County and the MLGW. What has struck me are the vast differences in the benefits and costs for the thousands of public employees. I will be writing further in the future about Memphis, Shelby County and MLGW but now I want to talk about MCS versus SCS.

In order to simplify the comparison I will compare the cost to the taxpayers (The taxpayers are paying 70% of the premiums with the employee or the retiree paying 30%.) for a family plan for active employees, retired employees not eligible for Medicare, and retired employees where the employee or the spouse is eligible for Medicare.

The MCS has one plan for active employees (basic medical plan) with the taxpayers paying $10,998 per employee per year. The SCS has three plans available with the taxpayers paying $7,756, $13,274 or $12,110 per employee per year.

For retirees not eligible for Medicare, they can stay on the same plans as active employees as shown above.

For MCS retirees where both the retiree and spouse are eligible for Medicare parts A/B and with 20 to 29 years of service, the annual cost to the taxpayers for a medicare supplemental plan is $4,527.

For SCS retirees where both the retiree and spouse are eligible for medicare parts A/B and with 20 to 29 years of service, the annual cost to the taxpayers for a Medicare supplemental plan is $5,938.

Now this is where it gets confusing. The SCS system is very clear that if the retiree or retiree and spouse are eligible for Medicare, they can only get the SCS medicare supplemental plan. The MCS apparently has the same policy although I have yet to see the written policy statement.

The state of Tennessee has a hand in this expensive confusing scene as they supplement the cost of this supplemental Medicare plan as shown on the attached brochure. The key difference here is that the SCS furnishes this state supplement only to retired certified teachers (not the retired local education support staff) whereas apparently the MCS furnishes this supplement to all MCS retired employees (retired certified teachers and retired education support staff), with the local taxpayers paying for the supplement for the retired local education support staff. When you consider that nearly half of the 13,500 MCS active employees are not certified teachers, then that is a huge cost.

There is a big difference in costs here and the new Unified School Board and the Transition Planning Commission need to standardize on a health care benefit system that takes into account what the private sector taxpayer can afford and then make it cost compatible.

1. http://us1.campaign-archive2.com/?u=65818e1159e4280b30712ea8d&id=b26087d282&e=e516fd101c

2. http://www.memphisshelbyinform.com

3. http://www.memphisshelbyinform.com/wp-content/uploads/2012/01/012712_tenn-medsupp_brochure.pdf

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