Next year's health insurance costs for Worthington schools will increase by approximately 28 percent, more than what was projected when the district switched to a "high-deductible" plan in 2006.

That change was part of the 2005 contract between the Worthington Board of Education and the Worthington Education Association. In a public statement made in August 2005, the district projected that teacher salary increases would be offset by insurance savings of "nearly 40 percent."

During the first year of the new plan, which encourages users to economize through a health savings account, the projected savings was seen. But since the first year, costs have begun to spiral.

In 2005, the district paid $12.3-million in health care premiums. The 2006 cost to the district was $8.4-million.

It increased to $9-million in 2007, and will go up to $11.5-million next year.

That amount is twice the amount of increase projected in the May 2007 financial forecast.

"This is an unplanned, unforecasted $1.25-million transfer of funds that could have been used for programs that directly benefit kids and enhance our product, in favor of an item that clearly does not directly benefit children," board member Marc Schare said.

The school board approved the increase at its Sept. 24 meeting, awarding the contract to current carrier United Health Care (UHC), which was not the low bidder on the contract.

According to district treasurer Jeff McCuen, there were five bids. The highest was dismissed because it was much higher than the others. Of the four companies that were considered, UHC submitted the highest bid.

That did not set well with Schare, who pointed out that the district could have saved approximately $450,000 by going with the lowest bidder, Medical Mutual.

"That is real money that we could be using to fund other programs," Schare said.

Part of the reason for opting to continue with UHC was the wellness program that the company will offer as a way to reduce future costs, McCuen said.

Also, if the district opts for the lowest bidder each year, companies will stop bidding because of the high start-up costs involved with changing carriers, McCuen said.

That happened in the Hilliard school district, which had only one bidder for its latest contract.

"We should have more than one anecdote before abandoning a policy of accepting the lowest bid," said Schare.

The other carriers also offer wellness programs, he pointed out.

Schare was the only board member who questioned the increase at the Sept. 24 meeting.

He does not expect the increase to be popular with voters, who will probably be asked to approve an operating levy in 2008 or 2009.

"I do not believe the citizens in the Worthington School District will vote for a levy whose primary justification is the continuation of a superior health care benefit that those very citizens can no longer afford for themselves," he said.

When the board and the Worthington Education Association ratified a three-year contract in 2005, annual salary increases of 3.75 percent, 3.25 percent, and 3.5 percent were justified by the change to a new type of insurance program that was supposed to "reduce costs in health care insurance nearly 40 percent," according to a press release from the district dated Aug. 30, 2005.

Then-Superintendent Rick Fenton was quoted as saying: "In the short-term, the shift in health-care costs funds the increase to salaries. In the long-term, the agreement has the potential to save money for the district."

The establishment of a health savings account for employees was meant to encourage employees to economize.

Schare pointed out that according to a response by UHC, that has not happened.

McCuen acknowledged that the savings has not been what was anticipated.

"I believe it will get better over time," he said.

He projected that next increase will not be as high as the 2008 increase.

Schare ended up voting in favor of the UHC contract on Sept. 24, but only because McCuen said there would not be enough time to make a change.

Had the contract been awarded to one of the other three companies, a transition in coverage would have taken 60 to 90 days.

"I am going to vote in favor of the administration proposal only because we no longer have any choice," Schare said.

He recommended that the board be represented on the insurance committee and that the board begin to understand in greater detail the correlation between member behavior and plan cost.

He also said there is a need to impress upon employees the importance of reducing claims; there is a need to analyze claims data, and there is a need to analyze whether self-funding is desirable.