STATEHOUSE (July 7, 2010) - State Sens. Brandt Hershman (R-Lafayette) and Luke Kenley (R-Noblesville) are encouraged by a report presented to the State Budget Committee today showing the potential for significant cost savings in school employee health care plans. Total potential savings of $454 million could help lawmakers craft a responsible, balanced budget next year and protect taxpayers from a tax increase during already tough economic times.

"Lawmakers are trying to find ways to stretch Hoosier tax dollars as much as possible, especially given the prolonged national recession," said Kenley, chair of the bipartisan budget panel. "This analysis shows that our state can save hundreds of millions of tax dollars and provides state and local leaders with new options as we move forward in crafting future state budgets."

Hershman, a member of the panel, said the findings show most K-12 schools and universities have generous health plans that cover a higher portion of services than the plan used by other state employees and their peers working at schools and universities in other states.

According to the report, participation by school corporations and public universities in the state employee health plan could achieve $454 million in savings through using a common provider network, consolidating broker and consultant services and aligning public school and university employees' contributions with those of state employees.

"Saving money on items like school employee health care would help us avoid tax hikes and dedicate resources to classroom instruction," Hershman said. "In a time of very limited taxpayer resources, we must focus on driving our education dollars to classroom programs, not overhead."

Kenley said currently, five public schools are voluntarily participating in the state's insurance plan and are expected to save approximately $3,600 per enrolled employee this year. If all public school and university employees currently enrolled in their existing health plans joined the state plan, approximately 125,000 new participants would be added.

In 2009, lawmakers approved language in the budget bill requiring the State Budget Agency to complete a review of health insurance for state employees, school corporations and public universities to determine if savings could be found. The full independent study done by Mercer Health and Benefits can be found at www.in.gov/legislative/senate_republicans.

Click here to listen to an audio Clip of Senator Kenley

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