House Republican Office
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FOR IMMEDIATE RELEASE For more information:
February 2, 2010 Jay Finegan, 287-1445
Republican Legislator Submits Bill to Save Health Insurance
Costs for Schools and Municipalities
AUGUSTA – State Rep. Ralph Sarty submitted legislation today to give municipalities and school systems the option to explore less costly health insurance policies as they grapple with deep budget cuts. The plan would permit them to purchase coverage out of state, where rates are generally much lower, or to band together in groups to self-insure.
“We’re looking at enormous budget cuts that will put extreme financial pressure on schools and municipalities,” said Rep. Sarty (R-Denmark). “Our public schools face a $92 million cut next year and maybe even deeper cuts in the following budget, when the stimulus money is gone. Towns and cities confront major cuts in revenue sharing. This bill will enable them to buffer those cuts by purchasing health coverage at more reasonable rates.”
State Rep. Rich Cebra (R-Naples), a co-sponsor, said the goal is to preserve positions in Maine schools and maintain municipal service levels to the greatest extent possible. “We’re in a true financial emergency, with so many of the budget cuts being pushed down to the local level,” he said. “Teachers are fearful for their jobs, along with everyone else in the schools, from cafeteria workers to bus drivers to custodians. The same holds true with municipal workers.
“The bill does not require any school system or town to change their insurance coverage,” he added. “It simply removes the barriers that have for years denied them the opportunity to look for more affordable rates. If they want to take advantage of an option to save serious money, they would be free to do so. As a rule, policies in other New England states are much less expensive for the same level of coverage available here.”
The bill is titled “An Act to Allow School Districts and Municipalities the Option to Seek Less Expensive Health Insurance Alternatives.” Rep. Sarty is working with the Legislature’s Revisor’s Office, where staff attorneys will craft the statutory language. The bill will borrow some of the terminology and provisions in LD 290, which would have allowed Maine residents to purchase health insurance from out-of-state companies. That bill, by State Rep. Jon McKane (R-Newcastle), was defeated last spring on mostly party-line votes.
“We’re hopeful that legislators in both parties will do the right thing,” said Rep. Sarty. “The budget cut all told comes to $438 million, and the impact will be horrendous at the school and town levels. We know that the out-of-state insurance bill was killed last year, but the situation has changed dramatically. If legislators want to help protect teachers and town hall workers and hold down unemployment rates, they should support this bill. We also would welcome the governor’s support. Allowing school districts and towns to band together for better rates fits right in with his consolidation strategy.”
Before the bill can advance to the full Legislature, is must be accepted by the Legislative Council. The 10 council members – six Democratic leaders and four Republican leaders – next meet Feb. 25. The bill has been designated an emergency measure.
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