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ERIC Number: EJ1199909
Record Type: Journal
Publication Date: 2019
Pages: 8
Abstractor: ERIC
ISBN: N/A
ISSN: ISSN-1539-9664
Health Care for Life
Aldeman, Chad
Education Next, v19 n1 p28-35 Win 2019
Los Angeles Unified, the second-largest school district in the country, is on pace to spend more than half of its annual budget on retirement and health-care costs by the year 2031. By then, it is projected to spend 22.4 percent of its budget on pensions and 28.4 on health-care benefits for current and former workers. The cost of health care is rising rapidly in all parts of the nation's economy, but the pressures in the public sector, and particularly in public education, are different. Like many school districts, where salaries are low compared to private-sector peers, Los Angeles Unified School District (LAUSD) has chosen to compensate by providing its teachers with generous health benefits. In fact, the district extends medical, dental, and vision coverage not just to current employees but also to retirees and their spouses, who do not pay premiums or deductibles and yet qualify for full benefits for life. So LAUSD's projected health-care spending includes 38,000 former workers and spouses, each of whom is estimated to cost up to $291,000 during their retirement years. LAUSD is an outlier in terms of how generous those benefits are, and the district has begun to roll back who is eligible to receive them over the past decade. Teacher retiree health care is perhaps the ultimate arcane issue in the education sector. There are no funders investing in solutions to this issue, there are few reliable sources of data, and until recently, states and districts did not even calculate how much they had promised in future benefits, let alone start saving to pay for those promises. However, over the past decade, new financial accounting rules have forced states and districts to start recognizing and publicly reporting those costs, which is likely to put even more downward pressure on teacher salaries and other school spending. These trends are contributing to broader teacher unrest, and were factors in recent teacher walkouts in states like Colorado, Kentucky, Oklahoma, and West Virginia. In this article, Chad Aldeman reviews the history and landscape of retiree health benefits, explains why those plans might not be having the desired effects on the teacher workforce, and explores options for reform.
Hoover Institution. Stanford University, Stanford, CA 94305-6010. Tel: 800-935-2882; Fax: 650-723-8626; e-mail: educationnext@hoover.stanford.edu; Web site: http://educationnext.org/journal/
Publication Type: Journal Articles; Reports - Evaluative
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A
Identifiers - Location: California (Los Angeles)