School District Pays For Health Care But Can't Get Itemized Bill : Shots - Health News Large employers like the Miami-Dade school district pay for employees' health insurance, but are often forbidden from knowing how much providers charge and insurers pay for care.

School District Pays For Health Care But Can't Get Itemized Bill

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If you get insurance through your job, most likely you've watched prices go up every year. Increasingly, companies think consumers will be more frugal when they shop for care if they have more money on the line. Turns out, the company doesn't know what doctors and hospitals actually charge for care. Insurance companies and providers keep it secret. And as member station WLRN Sammy Mack reports, what we don't know may cost us.

SAMMY MACK, BYLINE: About a year ago, at a Miami-Dade County school board meeting, Superintendent Alberto Carvalho was happy to announce the district and the teachers union had just ratified a new contract.


SUPERINTENDENT ALBERTO CARVALHO: And I believe that this contract honors and dignifies what you do every single day.

MACK: And included bonuses for most teachers and it settled how to handle health care expenses after yet another year of rising costs.


CARVALHO: We know exactly what the district pays out in terms of claims because we are the insurance company. There's no profit to be made.

MACK: And that's because, like most large employers, the Miami-Dade school district is self-insured. It bears the financial risk of covering its own employees. But the school board's reaction to the health care costs in the new contract was incredulous. They're an elected board and didn't look forward to telling teachers their prices were still going to go up. One board member after another questioned the rise in prices.


UNIDENTIFIED WOMAN #1: Do we sit with our employees knowing what their salaries are and help them insurance wise?

UNIDENTIFIED WOMAN #2: Twenty-seven hundred dollars more for his family's health - can you please comment on that?

UNIDENTIFIED WOMAN #3: Our employees are tired of hearing about the rise in health care cost.

MACK: This was not the conversation the superintendent expected.


CARVALHO: I thought we would be coming here today and first and foremost celebrate something pretty remarkable.

MACK: And a year later, with another new contract, the school board is still grappling with health care costs. Fedrick Ingram is head of the Miami-Dade County Teachers Union, which represents nearly 15,000 members.

FEDRICK INGRAM: Our salaries have not gone up in the same way that health care costs have gone up.

MACK: So, Ingram says, he's been urging the school district to figure out where the money is going.

INGRAM: We have to know what's going to affect the bottom line for our premium cost and what is actually contributing to that.

MACK: Turns out that is incredibly difficult to do. But it's a conversation more businesses should be having, says Uwe Reinhardt of Princeton University. Businesses and employees need to stop taking for granted that rising health care costs are inevitable because they make trade-offs, says Reinhardt.

UWE REINHARDT: Employees actually pay for what they think is company provided insurance by lower wages.

MACK: But it's so hard to get costs under control, says Reinhardt, because the actual prices are secret. Self-insured organizations, like Miami-Dade County Schools, still have to hire an insurance company to manage the claims process and negotiate rates with hospitals and doctors. But insurers and providers keep the rates secret even from self-insured employers taking the financial risk.

Carvalho's right - the district knows exactly what it pays out overall for health care claims. What it doesn't know is how much it's paying to any one hospital or provider for a given service, which means it doesn't know what providers are the most expensive or who's the cheapest, which may drive prices higher for employees.

CARVALHO: It's almost like blindfolding people, shoving them into Macy's and say by efficiently for a shirt. Well, you come out with a pair of shorts.

MACK: The school district is subject to the state's open record laws. Still, the insurance carrier they use for employees - Cigna - refused to share accounts of what was actually paid out, citing trade secrets. Even though the county school district, which is taxpayer-funded, takes on that risk, it's not allowed to see the contracted prices.

The district is seeking ways to get around the legal obstacles and at least figure out average costs. Ideally, district officials say, they'd like to know enough about cost to offer incentives for employees who choose less expensive options. Until there's more transparency, Miami-Dade Teachers Union member Cheryl Collier thinks the situation would offend even her second graders.

CHERYL COLLIER: They would be angry that they are being forced to pay for something not really fully understanding the value of what they are paying for. Yeah, even a second grader would be upset.

MACK: It's a lesson the school district and other employers are starting to learn. For NPR News, I'm Sammy Mack.

SIMON: This story's part of a reporting partnership with NPR, WLRN and Kaiser Health News.

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