Santa Cruz County teachers, staff see health insurance costs increase dramatically

Lauren Pomrantz is tightening her family’s budget starting this fall as her monthly health insurance premium for herself and her three kids increases more than 70%, from about $700 to $1,200.

The Live Oak School District teacher is one of hundreds of employees in school districts across the county who saw significant increases to their health insurance costs this year. Soquel Union Elementary School District faces similar increases. 

“It was a gut punch,” said Pomrantz, who has a Blue Shield Health Maintenance Organization (HMO) plan. Her husband has health insurance through his employer. 

Union leaders say the health insurance rate hikes feel like the final straw for many of the county’s teachers after years of fighting for higher salaries, enduring the least affordable rental market in the country and varying levels of austerity and cuts from budget crises. Pomrantz and Soquel Union Elementary teachers union co-president D-R. Martin both said they’ve heard veteran teachers in their districts say they’re considering leaving their jobs for better salaries and benefits packages. 

San Lorenzo Valley Unified and Mountain Elementary school districts use the same health insurance broker as Soquel and Live Oak, but they didn’t respond to Lookout’s requests to confirm if teachers in their districts are facing the similar premium increases. 

The teachers’ health insurance hike appears to be a by-product of many of the health access and affordability issues plaguing Santa Cruz County. 

Pomrantz, a co-president of Live Oak district’s teachers union, said she and other district staff first learned about this year’s increase last spring in a meeting with representatives of California’s Valued Trust, a not-for-profit trust that manages health care insurance for more than 238 TK-14 districts across the state. The 40-year-old trust was created to lower health insurance costs for school employees by pooling resources together.

Representatives of the trust told Live Oak district leaders that rate increases ranged from 11.6% for school employees with Kaiser Permanente plans to 28.6% for those with a Blue Shield Preferred Provider Organization (PPO) plan. That’s on top of a 12% increase last year on average, Pomrantz said. 

“Based on this percentage increase, we knew that we were going to have some really serious hits to our income and some really serious conversations needed to kind of think about what level of care we can afford now,” she added.

California’s Valued Trust spokesperson Ron Ballecer told Lookout the organization raised the coverage rates due to “increases in hospital, provider and prescription drug costs across California” and that Santa Cruz County’s health care costs are among the highest in the state. 

Jeff Cornelius, the trust’s director of strategic initiatives, declined to share how the increases across Santa Cruz County compared to those for other school districts served by the trust elsewhere in California. 

“CVT member districts in Santa Cruz County received the same renewal as members in other high-cost regions of the state,” he wrote via email, reiterating that the county’s health care costs rank among the state’s highest.

Pomrantz told Lookout that in its meeting with CVT last spring, the trust’s representatives described what could be some of the root causes. She said the presentation noted that because doctors in Santa Cruz County also have a hard time making ends meet here and leave for more affordable areas, there’s a shortage of primary care providers. With fewer primary care doctors, residents struggle to get regular preventative care and postpone treatments. That leads to people ending up in emergency rooms at higher rates and having longer hospital stays, which significantly increases costs for insurers. 

In its message to Live Oak School District about the increase, the trust listed several major factors behind the rising health insurance costs: increased medical services costs, rising drug prices like for autoimmune conditions and cancer and drugs managing blood-sugar levels, as well as a higher use and growing costs of mental health treatment services. 

The soaring health insurance premiums in Santa Cruz County mirror a broader trend across California. Premiums under Covered California, the state’s Affordable Health Care Act health insurance marketplace, were already set to rise an average of more than 10% next year because of higher health care costs. Earlier this month, Gov. Gavin Newsom said premiums for marketplace insurance could double on average without an extension of federal tax credits, which are at the center of the congressional battle that has led to the ongoing federal government shutdown.

County Superintendent of Schools Faris Sabbah told Lookout that he’s heard from several teachers and staff from the affected districts who asked if the county office could do anything to reduce the costs: “We’re continuing to look at it, but I haven’t identified solutions that look promising at this point.”

Sabbah said each district negotiates how much general fund dollars it puts toward each union’s benefits costs. For example, at Pajaro Valley Unified School District, the district pays, on average, for about 90% of its employees’ benefits – likely the highest in the county. 

“In some cases, the district chooses to pay a higher percentage of the benefits costs, and in other cases, they raise compensation but reduce the percentage of benefits covered,” said Sabbah.

Pajaro Valley Unified School District, as well as Bonny Doon Elementary, Happy Valley Elementary and several other local districts and the County Office of Education, have a different health insurance broker, Self-Insured Schools of California (SISC). Sabbah said that SISC also had an increase this year, but at about 8% on average. 

Sabbah said the rising costs of health insurance is a major concern for local educators – as well as housing costs and other basic needs expenses that Santa Cruz County residents are struggling with. 

“We’re seeing declining enrollment and lots of families leaving the area because of the cost of living — this is a big driving factor,” he said. 

At Live Oak School District, monthly premiums for four staff members are over $2,000, 13 are paying over $1,000, and nine are paying over $800, according to Pomrantz. She said these costs don’t include dental or vision or any other deductions like union dues or life insurance. 

“The impact to members is significant and is causing many to consider leaving the district for nearby districts who offer more money for health care,” she said, mentioning teachers expressing interest in PVUSD’s more generous benefits package. She added that other teachers are considering commuting to the San Jose area, where pay is higher. 

Pomrantz, near the top of the district’s pay schedule, makes about $100,649. Because she plans on using her providers often for a health condition, she’s staying with the more expensive medical plan to ensure she gets the care she needs. 

“In my family, we had to really sit down and look harder at the budget,” she said. “I’ve got to come up with an extra almost $500 a month to be able to afford this health care – that’s not just sitting there in a family of five.” 

She said Live Oak School District administrative officials understand how much the rate increases are affecting teachers. Administrators are facing similar increases themselves, she said, and some are also considering leaving. 

The district, as other local school districts, doesn’t have the budget to be able to cover more of the costs of employee health premiums and has had deficits the past two years. The district already pays about 23% of its general fund toward health benefits for its employees. 

“There’s nothing anybody can really do about it,” Pomrantz said. “We all felt this incredible hit, it just depends on how much you’re making.” 

Teachers and staff at Soquel Union Elementary School District are similarly hard hit by premium hikes. Soquel Superintendent Turnbull told Lookout that the increases are “truly a burden” on all of the district’s employees. 

“It pains me that our hard-working and skilled staff members have had to endure these increases,” he wrote to Lookout. “We have been sure to do our due diligence and leave no stone unturned in an attempt to address the situation.” 

Turnbull said district officials approached SISC about switching away from California’s Valued Trust. But SISC told Soquel Union Elementary that the district was too small to meet its minimum group requirements. 

Soquel teachers union co-president D-R. Martin told Lookout that some teachers and district officials think the district could look into long-term solutions like a parcel tax to at least put the district in a better financial position which could help bring down health care costs for teachers. She added that the union has been part of a statewide campaign for higher salaries.

Martin said her “heart sank” when she first saw the rise in premiums. Rather than pay the 28% increase for her plan, she switched to a cheaper plan. Still, she’s paying $153.93 per month more than she did last year for the plan with more coverage. 

Last year, her monthly premium was $492.82 for PPO3 with RX B – a plan she said she received a high amount of coverage for. Under the new rates, that plan’s premium would have gone up to $784.74. 

Her new plan, Wellness RX-C, provides less coverage for a premium of $646.75. Her deductible is increasing from $100 to $500, and after she reaches it, she’s covered at only 90% instead of the 100% covered by her previous plan. 

It’s a trade-off she’s willing to make to be able to continue to afford health insurance. “How do you come up with that kind of money?” she said. “Santa Cruz County is so expensive. Most people are barely making ends meet as it is.” 

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