District Trendline

Affording to stay healthy: The costs of health insurance for teachers

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We have all been there: As soon as school starts, and especially during cold and flu season, we brace ourselves for the germs that will assail our families and we begin to take all sorts of precautions. If it is a big issue for families at home, imagine how important it is for teachers to have adequate and affordable health care.

Unfortunately, the skyrocketing price of health insurance means that this coverage comes at an increasing cost for both teachers and school districts. Since 2018, the average monthly premium that teachers pay for health insurance has increased at a faster pace than the rate of their average salary increase.

In this District Trendline, we look at how the cost of health insurance premiums has changed over the past five to six years (depending on data availability), and how employees and employers seem to be responding to these changes. We also highlight states and districts that are going the extra mile to keep health care benefits affordable for their teachers.

Cost of health insurance
Since 2018, the overall cost of living in the United States has increased by 17%, but the cost of health insurance in general has increased by 45%.983 Public school employees have not shouldered the full burden of this increase in health insurance premiums since the government is usually able to negotiate better rates than the private sector. According to the latest data from the Bureau of Labor Statistics (BLS), the average cost of public-school employee health benefit contributions (the portion of their premium employees pay) increased by 14% between 2018 and 2022. According to the latest national salary data, public-teacher salaries increased by 10% in the same time frame, meaning that health insurance premiums and the general cost of living are increasing faster than educators' pay raises.984

In terms of dollars, the average premium that public school employees pay for their own health insurance has gone from $139/month in 2018 to $162/month in 2023.985 If these employees sought coverage for their families (hypothetically including a spouse and two children), their monthly premium would have increased from $592 to $711 per month in the same time frame. While the dollar increase in teachers' salaries is more than enough to cover these increased premium costs, their salaries do not stretch as far as they used to given the overall increase in the cost of living.

When it comes to family coverage, even the most affordable plans have increased their cost at a rate higher than teacher salaries: The most affordable family health care plans in the nation986 have increased their premiums by 16% between 2018 to 2022, compared to 10% average teacher salary increases in the same time frame.

Figure 1.

Employers are facing these cost increases in similar proportions. Districts are now paying an average of 13% more for single coverage and 12% more for family coverage, compared to 2018.

Fortunately, despite the additional cost that this also signifies for employers, districts are holding steady in the share of the health insurance premiums they cover: 84% coverage on average in the case of a single person, and 64% coverage on average in the case of a family. To put this in perspective, private industries pay between 78% and 80% of their workers' single coverage insurance premiums, and between 65% and 79% of their family coverage insurance premiums, depending on unionization status.

Do employees still sign up for health insurance, even with increased costs?
If health insurance becomes too expensive, we may see lower employee "take-up rates" (whether employees sign up for these benefits when available).

Access to overall health insurance (medical, prescription, dental, and vision) has remained stable since 2018, with about 90% of public school employees having access to medical and prescription coverage, 55% to dental insurance, and 34% to vision insurance. Access, as defined by the BLS, means availability in that districts are providing employees with the choice of enrolling in a health insurance plan.

However, employees' take-up rates on prescription, dental, and vision benefits, which typically track access rates closely, dropped between 3 and 7 percentage points as insurance rates became more expensive in the last five years. This may reflect employees trying to manage costs by dropping the portions that they might consider to be less essential. Although take-up rates have stabilized in the last two years, this has still resulted in slowly declining percentages of our nation's educators protected by health safety nets compared to five years ago.

Figure 2.

Learning from some states and districts
Of the 79 districts in NCTQ's Teacher Contract Database987 for which we have data on this issue, 38 districts still cover 100% of an employee's health insurance premium,988 and two others cover 100% for a subset of teachers.989 Additionally, 18 districts even cover at least 95% of teachers' dependents' premiums (with a few caveats in some districts).990

Some states have been able to successfully negotiate only minimal increases in health insurance rates and other expenses for their public school employees. Such is the case in North Carolina, where health insurance premiums, deductibles, and out-of-pocket maximums have remained unchanged since before the pandemic, according to data from the Southern Regional Education Board (SREB). North Carolina provides state-level health insurance, which allows the state to negotiate a plan with better rates, as it has a much larger employee population than single districts.

Some school districts are also making an effort to maintain affordable health insurance for their employees. For example, Brevard Public Schools (FL) and Fairfax County Public Schools (VA) have both increased the share that they, as employers, cover of their employees' health insurance premiums by a couple of percentage points since 2020. They also provided their teachers with salary increases that exceeded the increase in the cost of health insurance.

Alpine School District (UT) stands out for continuing to cover the entirety of its teachers' health insurance premiums (including family coverage) since before the pandemic, while at the same time increasing its teachers' salaries by 35% since 2018.991

The cost of health care is a problem that extends well beyond public education. So what can education authorities do to help keep health insurance affordable? States and large school districts are in a unique position to negotiate favorable health insurance rates for their employees, and they ought to continue doing so. Leveraging the size of their health insurance purchases, combined with prioritizing vendors that have transparent pricing, could lead to more affordable health care for teachers. In addition, forming consortia of geographically related school districts could help leverage their combined purchasing power and allow for better negotiations.

Additionally, and especially as federal pandemic relief funds known as ESSER funds dry up, districts need to be very intentional about how they use their limited funds. Making sure that teacher salaries are keeping up with the cost of living—and with health insurance costs specifically—needs to be a top priority to recruit and retain a qualified, diverse, and effective teacher workforce.

This post was updated on February 21, 2024, to clarify the time periods being compared.