Posted on 04/24/2005 7:04:57 PM PDT by Dan from Michigan
Michigan Education Special Services Association: The MEA's Money Machine
This exhaustive report illuminates the inner workings of the Michigan Education Association's health insurance division, known as MESSA. It documents how tens of millions of the public's education tax dollars are wasted each year on uncompetitive teacher health insurance, and how MESSA is part of a systematic plan to subsidize the MEA's basic operation and political activity. 64 pages
Executive Summary
Over one year ago, the Mackinac Center for Public Policy was approached by a concerned parent who had watched his school district, during a heated contract negotiation, spend over half a million dollars more for teacher health insurance than seemed reasonable. In addition to the excessive costs, the fact that the insurance provider was a subsidiary of the Michigan Education Association (MEA) caught his attention. The Mackinac Center investigated and, after nine months of research, has summarized its findings in a report titled Michigan Education Special Services Association: The MEA's Money Machine.
This report documents two important findings: (1) tens of millions of education dollars are wasted each year on unusually costly teacher health insurance; and (2) the MEA's insurance subsidiary is part of a systematic plan to use money intended for education to subsidize the MEA's basic operations and political activity.
The Michigan Education Special Services Association (MESSA, pronounced MAY-sah) is a wholly-owned, non-profit subsidiary of the MEA. It is a third party administrator of health insurance benefits to public school employees who are MEA members. MESSA contracts with the school district to provide benefits, and then administers insurance actually underwritten by Blue Cross/Blue Shield of Michigan. MESSA keeps a portion of the school district's payment to cover its "administrative" costs.
MESSA currently dominates the public school employee benefit market, providing insurance to over 300 of Michigan's 524 K-12 school districts. MESSA took in over $360 million in premiums in 1992 alone. To put this amount in perspective, it is roughly 6 percent of the total revenue cut under Senate Bill 1, which eliminated the local school operating property tax.
The following describe the reports two major findings:
1. Excessive Costs for Insurance Benefits
There are two reasons why the cost of MESSA health insurance is excessive.
One is the extremely high administrative costs of the MESSA/Blue Cross operating agreement. In addition to high salary and benefit levels for MESSA employees and questions of productivity, both MESSA and Blue Cross have separate claims processing facilities that require redundant expense. MESSA also supports the extensive data processing facility that the MEA uses for its basic operations and political activity. MESSA and the MEA also "share" employees for lobbying and other purposes.
School districts also have a difficult time soliciting competitive bids because MESSA, unlike other insurance providers, refuses to provide a claims history. A claims history is a record of the bills submitted by the school district employees for payment or reimbursement. These are used as a basis for bids by competitors.
The second reason why the cost of MESSA insurance is excessive is the design of the benefit packages. MESSA benefits are extremely generous, and cover most health-related procedures in full or nearly full. These benefits are well in excess of what comparable private employers in the same area provide their employees. One reason for this is that the MEA likes to compare benefits to other school districts around the state, which already may be at high levels, rather than other local employers.
2. How MESSA Supports MEA operations and political activity.
During the mid-1950's to early 1960's, the MEA provided benefits as a way to entice school employees to join it rather that its rival, the Michigan Federation of Teachers. MESSA was created in 1960 as part of an orchestrated effort to use insurance benefits to gain union support and as a source of revenue to fund union operations.
Today, MESSA pays the MEA millions of dollars in exchange for having local MEA bargaining agents pressure school districts into purchasing expensive MESSA insurance. The benefits serve to keep many union members supportive of the union even though they may disagree with the MEA's position on political or educational issues.
Both the MEA and MESSA fund lobbying staffs in Lansing, and the MEA is the state's largest single supporter of political candidates through its political action committee. The influence of the MEA is one of the main reasons Michigan school reform efforts have been thwarted at nearly every turn.
The study recommends several ways to minimize the harm the current MEA/MESSA relationship is imposing on school districts. First, the Public Employment Relations Act, which mandates collective bargaining with public school employees, should be amended to either exempt teachers altogether or eliminate health insurance and other benefits as a mandatory topic of bargaining. The former would still allow teachers to join a union, but not be forced into membership or support. The latter would still require school districts to bargain wages and other conditions of employment, but they would have more freedom to select insurance providers based on cost and merit, not political pressure.
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MESSA is the middleman between Blue Cross insurance and the school employees. It is owned by the MEA, which is the teacher's union. MESSA is the sacred cow of the union management, and is so corrupt it makes Ed McNamara's Wayne County machine look almost clean.
What needs to happen is for all of us to elect competent school board members May 3 who understand fiscal management. Then we need to make sure they sign off with fiscally conservative contracts so our school districts live within their means. This is not happening and does not happen when 90% of the populace are lazy bums when it comes to voting in school elections. In my county, Livingston, some of our schools are in debt, and are now pushing for a tax increase. A countywide millage is on this ballot. All except one school board member voted to support the millage and to have the taxpayers bail out the schools for three years.....since MESSA wasn't touched.
It's time for our schools to live within their means.
OMG, and I thought California's state system was ripped bad with fraud and gross "mismanagement"...well the ownership by the Teacher Union of MESSA says it all. Crime, corruption = the libs!!!
I briefly worked at MESSA in a temp gig in East Lansing 'waaaaay back in 1985.
It was not a lot of fun, as I recall.
LOL! Did they have the giant multi-million dollar building on Saginaw St then? I used to drive by that thing all the time to avoid Grand River's traffic jams.
I never though a conservative could ever walk through that door. You don't still have any of their files, do you?? :)
IIRC, they were in a pretty large bldg., but it was on Abbott Rd....?
According to Google Maps, it looks like they're still at the same location.
My general recollection of the place was 1) it was FREEZING COLD at the time [dead of winter]; 2) I was in Cubicle Hell with some not-real-bright folk; and 3) none of the "lifers" there wanted to even acknowledge us Temps at lunch.
I'll be back..
This may be going in here, i'll have to read the whole thing.
http://www.rusthompson.com
3) none of the "lifers" there wanted to even acknowledge us Temps at lunch.
I'm not surprised in the least.
I've heard the NEA and other unions want to try and impliment that nationwide and at other state institutions.
I hope for your state's sake it doesn't happen. The sad thing is that I never heard of MESSA until this year.
It's new to me too. I am running for Legislature in Erie county NY and we have to look into everything.
Corruption has got to come to an abrupt end.
This reads more like one big MESS-a to me.
My FReepin' hubby works for Maximus, which is basically an insurance broker for a number of different states. Since they have taken on the Medicare/Medicaid contract in Michigan, the state has saved millions annually--and Maximus is only handling enrollment for benefits. Time for the districts to start shopping around (not that they ever will).
Practical question: Since I am home all day, every day, and I haven't got a lot on my plate today, who do you think I should call and needle about this first? The superintendant of the school district? Someone from the school board?
My family is from Hamburg! I used to go to the Erie County fair ever year--my Grandma lived on Clark Street, right down from the fairgrounds. Good times!
Not to far from me, I live on Grand Island..
It's the same in my school district. There are more administrators than there are teachers. The schools are fueled by property taxes, with assessments rising at about three times the rate of inflation over the past ten years or so. In spite of this cash inflow, the district cries that it's broke, and tried to pass a $60 Million bond issue last year. Even the lib voters shot that down. Makes you wonder where all the money's going.
I'd tell them that you want them to avoid the budget problems and millage fight that is going on in Livingston County, and MESSA is a major reason for the costs. Michigan employers paid an average cost of $6,400 for full family benefits. The average cost in school districts for full family benefits is over $10,000.(Source - Detroit News).
Yeesh! Multiply that by the number of employees receiving bennies and you have Perot's "giant sucking sound."
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