Four days after Gov. Rick Snyder recommended a 2011-2012 budget that would reduce state aid for schools by $300 per pupil, the Petoskey school board proposed a plan to reduce the district’s teacher and support staff health insurance costs. Its timidity reveals why the public school establishment finds even the prospect of modest state funding reductions so traumatic ($300 is just 3 percent of the $9,742 Petoskey spent per student in 2009).

The most aggressive part of the Petoskey board’s plan is to cap the district’s future health insurance premium payments at next year’s level. But those capped rates would still be significantly out of line with private-sector averages. The Petoskey News reports the district anticipates spending $17,756 for each employee enrolled in a family plan next year. That’s roughly 72 percent more than the private-sector average in Michigan.

Other components of the proposal won’t substantially control costs either. For example, the district would still pay 100 percent of the cost of the premiums for the next school year, while in the private-sector, Michigan employers pay just 79 percent, on average. Other tiny tweaks include changing the current $10 prescription co-pay to a $10 generic/$20 name-brand co-pay and establishing a $200 annual deductible for a family plan ($100 for single).

Additionally, any employee choosing not to enroll in the district’s plan would still get paid an extra $522.23 each month, effectively wiping out a large portion of the savings the district might realize when employees enroll under a spouse’s plan. Freedom of Information Act requests by the Mackinac Center have revealed this “cash-in-lieu” of health insurance benefit to be common practice in most districts.

Finally, the district would also still agree to forfeit its rights as the policyholder of its own insurance benefit by purchasing the plan through the Michigan Education Special Services Association, an arm of the Michigan Education Association, the state’s largest teachers union. MESSA would remain the actual policyholder and administrator of the program; last year, its statewide premiums increased by 13 percent, on average.

Limp efforts to contain school district health insurance costs give momentum to legislative proposals to require that districts align their costs with private-sector averages, either through greater employee cost-sharing, or by capping district premium expenses at much lower levels than Petoskey proposes. One response from school employee unions and districts is banging the “local control” drum. But if this means playing “enabler” to tepid proposals like Petoskey’s, the Legislature can’t be blamed for taking such complaints with a grain of salt and using its authority to right-size school health care costs from above.