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Tuesday, October 14, 2008

Madison School District Approves Health Insurance Changes

The Madison City Commission may not have found anything to do last night, but the Madison Central School Board still had an agenda worth meeting about. Among the items handled were changes to the district's health insurance plan (PDF alert!). Premiums are going up, but only by 1.1 to 1.3 percent. That's not bad, considering that last year, health insurance premiums for employer-based plans nationwide increased 6.1%, triple the rate of inflation—and that was the lowest increase this decade. Overall, health insurance premiums nationwide have doubled since 2000. Ugh. Let's hope Madison Central can sustain those relatively low premium increases.

Of course, health coverage is still far from cheap. With the new increases, Madison teachers will pay $11,616 a year for the best family plan. That's just 4% less than the 2007 national average for family coverage of $12,100. (I'm looking for a 2008 average to compare, though I suspect we don't have that data yet.) So much for the benefits of that lower cost of living in South Dakota—

Hey, wait a minute: I thought our amazingly low cost of living balanced out our amazingly low wages? That's what Russ Olson said last week at the candidates forum: he thinks South Dakotans' wages are actually tenth in the nation once you factor in cost of living. Well, as I've pointed out before, our low teacher wages are still way out of whack with our cost of living. If we factor these salary figures by these cost of living figures—divide salary by overall cost-of-living index—South Dakota's teacher pay ranking increases from 51st to (sound the trumpets) 49th. Factor those salaries just relative health care costs, and South Dakota's teacher pay ranks even better... 40th in the nation.

Russ, feel free to forward me that study by Dr. Ralph Brown. In the mean time, stay healthy, teachers!

Update 2008.10.15 07:27 CDT: The Kaiser Family Foundation says that last year, the average annual employee contribution to an employer-based family policy in 2007 was $3,281. As I note in comments below, the school district here kicks in $360 a month for each employee, or $4,320 a year. For the cheapest family coverage offered by the Madison school district (the $2,500/$5,000 deductible), an employee will pay $4,068 in 2008-2009. The top family plan ($500/$1000 deductible) will run teachers $7,296.


  1. I too was at last weeks forum and was shocked to think that Russ Olson actually would say and believe such a thing.I am sure he did not gain any teacher votes by this comment Another reason to vote Scott Parsley for State Senate.

  2. Is this $11,000 plus what the teachers actually pay out of pocket? Or is the total amount paid by both school and teachers?

  3. This is off topic, but I'm so excited I have to post it!

    FINALLY, one of Obama's senior economic advisors stated how he is cutting 95% of people's taxes (even though only about 60%+ pay income taxes).

    Obama is not talking about income taxes; he knows many don't pay any income taxes. BUT, he is talking about rebating $500 back of people's PAYROLL taxes every year. But, aren't payroll taxes not actually a tax but really an investment in our own personal Social Security retirement? So now some people won't have to contribute to their Social Security while others do? Talk about class warfare and socialism! At least the truth is finally coming out. I just hope people are listening.

    If I make $40,000 and FICA is 7.5% paid by me and 7.5% paid by my employer, I will pay in $300 per year. But I will get back $500!! Where do I sign up? Not only do I get free Social Security retirement benefits, but the gov't is giving me extra money too??

    Notice - our gov't is broke! Where is all this gimme money coming from? Oh, yeah, all them rich folks! Ha! It will be coming from me in the middle class.

  4. where did you find this anon 3:05?

    Payroll Taxes
    looks like kind of a generic term to me.

  5. Good question, Anon 2:50! I wasn't sure, either, so I went straight to the source. Cindy Callies (she's the business manager, so she knows) says the district pays $360 toward every employee's coverage. That covers the cheapest (i.e., highest deductible) individual plan. If an employee wants a lower deductible or wants to add a spouse or kids to the plan, the employee pays the amount over and above that minimum.

    So yes, I should correct my statement: Madison teachers don't pay that $11,616 a year all on their own. They pay $7296 for a family plan; you and I pick up the remaining $4320. (Mighty nice of us.) But whatever the employee/employer ratio, I'm still surprised that the cost of a health insurance policy here is only 4% less than the national average.

  6. Anon 3:05: You know, if you have a new topic you can't wait to bring up, you could start a blog of your own. Register at RealMadison.org, and blog away, no waiting! ;-)

  7. Jeremiah, this was a Fox News interview with one of Obama's senior economic advisors (I didn't have time to read his name before it disappeared, but his title under his name was Senior Economic Advisor). He admitted that many people would not pay income taxes, so his meaning of payroll taxes would not include income taxes as those would already be refunded under our IRS laws. Therefore this advisor meant that Obama means to give everyone back $500 toward the other part of their payroll taxes, which is their Social Security and Medicare contributions.

  8. One reason Madison may appear to have higher health plan costs is because staff have their choice of moving to a lower deductible and paying the difference, which many will do. While families in the private sector are using $2500 or $5000 deductibles, some in our schools are paying extra to have $500 or $1000 deductibles, which equates to higher costs. It probably needs to be compared, apples to apples, which would make our local costs lower in comparison to national figures if deductibles are equal.

  9. Anon 3:05 Next time you shoot your mouth off get your math right. 7.5% of $40,000 is $3000 not $300 as you claim. Maybe if you had some actual business experience such an obvious math error wouldn't come rolling out of your flapping lips.

  10. Sorry for the math error. Doing too many things at the same time. My point is still that whether or not you pay income taxes, Obama finally admitted through his senior economic advisor that his 95% tax cut includes people who pay no income taxes. He has never admitted that before.


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