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Legislature Frets About SDHSAA, Ignores ASBSD Health Plan’s Multi-Million Cost to Taxpayers

Instead of choosing to bully the South Dakota High School Activities Association, the organization that makes possible all those state tournaments everyone loves to attend and whose recent audit problems showed no apparent cost to taxpayers, perhaps the Legislature should have dedicated one of its summer studies to the Associated School Boards of South Dakota, whose flawed health insurance plan has put several school districts on the hook for millions of dollars:

Harrisburg and 58 other districts in the self-funded insurance pool managed by the Associated School Boards of South Dakota faced a financial shortfall of nearly $10 million. Counting claims not yet processed — known in insurance lingo as “the tail” — the total liability for the protective trust that uses Avera Health as a vendor is estimated at $14 million.

School districts planning to leave the pool would be responsible for their share of the debt, putting taxpayers in the line of fire. For Harrisburg and other area schools such as Canistota, Canton, Dell Rapids, Mitchell and Sioux Valley, that reality arrived like a smack in the face [Stu Whitney, “Schools Outraged over Health Plan Debt,” that Sioux Falls paper, 2015.05.01].

How’d ASBSD dig this hole for local school districts? By not telling them what was happening:

Critics point to a lack of transparency and faulty governance of the trust on the part of the Associated School Boards of South Dakota, which failed to effectively address the shortfall or alert members to the severity of the problem.

Members were charged more for going to “out of network” providers, and the cost of those claims exceeded the amount of premiums coming in. The hole grew deeper despite the fact that most school districts had no idea what was happening [Whitney, 2015.05.01].

The Legislature does have one more summer study slot to fill. If they’re worried about issues of real import to taxpayers, they could still do an inquiry on health coverage for K-12 school employees by the Associated School Boards and every other insurer. Then again, if the Legislature would simply expand Medicaid, you could probably put some starting teachers who have a spouse and two kids on Uncle Sam’s tab. (Medicare for everyone would be so much simpler and less costly, wouldn’t you agree, school business managers?)


  1. tara volesky 2015-05-03

    Why aren’t these teachers on Obama Care? Wasn’t that suppose to save people hundreds of dollars in insurance costs. Or is Obama Care, Avera and Sanford.

  2. caheidelberger Post author | 2015-05-03

    That’s the thing, Tara: You can’t sign up for ACA marketplace coverage if your employer offers coverage.

  3. tara volesky 2015-05-03

    Well that’s stupid. They raised Avera insurance on the Mitchell School District about $500 dollars a month per family. Where’s the competition? I thought anybody could sign up for the affordable care act.

  4. Patrick Duffy 2015-05-03

    Somebody made a series of gigantic arithmetic and actuarial errors.

  5. caheidelberger Post author | 2015-05-03

    How could they make such large errors and not correct them immediately? Did ASBSD think the shortfalls would just go away before anyone found out?

  6. caheidelberger Post author | 2015-05-03

    Tara, the ACA protects everyone from being made uninsurable. But the marketplace is only for folks who don’t have coverage through their work.

  7. John 2015-05-03

    Wait a minute. A “lack of transparency and faulty governance” are 2 hallmarks of the proud tradition of South Dakota governance. How about the analysis swinging to taxpayer and voter accountability – they voted in the legislatures that chronically under-funds education into office, they voted for the governor who appointed the SDHSAA, they voted for national and state representatives opposed to reform of healthcare and its funding. How about an analysis that shows these 58 school districts received e x a c t l y what their voters supported and sought for years. How about an analysis showing that long-lost republican virtue of “accountability”.

  8. caheidelberger Post author | 2015-05-03

    Fact check, John: at what point did the Governor appoint the SDHSAA?

  9. Mr. Sol 2015-05-03

    With reinsurance and proper setting of rates, I’m not sure how this large deficit occurred. Perhaps there was a lapse of the duty of due care for not providing full accountability. Getting out of a self insured plan is always messy with the “tail” issue.

  10. Mary N. 2015-05-03

    Yes, I am wondering what the history is behind the SDHSAA: origination date and philosophy? the originator(s)? the administrator(s)? quasi government or a private group getting on a gravy train? who’d they report to? etc? Lastly, for the powers that be–when are heads going to roll? Total mismanagement.

  11. Mary N. 2015-05-03

    I meant to say ASBSD instead of SDHSAA.

  12. John 2015-05-03

    Thanks Cory, I made a false presumption which I should have first researched; my rare apology to a governor, yet nevertheless, the rest of my accountability doctrine remains sound.

  13. caheidelberger Post author | 2015-05-03

    No problem, John. I hear a lot of misconceptions about SDHSAA; it’s useful for everyone to clear them up.

  14. rollin potter 2015-05-03

    Leave it to the good ol’ voters of south Dakota!!!!! Go in and mark a ballot that is shoved in front of them and the majority have no idea what or who they are voting for!!!!!!!!

  15. tara volesky 2015-05-03

    SD health insurance is messed up.

  16. grudznick 2015-05-03

    If the ASBSD provides health insurance that qualifies under Obamacare then so be it. It is Obamacare to blame for the messes, not the employers that offer a fine and dandy free insurance for their employees. The teacher’s union probably pushed them into this teetering over the abyss situation.

  17. caheidelberger Post author | 2015-05-03

    There once was a chapter of South Dakota law (SDCL 13-9) that dealt with the ASBSD, but it was repealed in 1975 and 1976. The online records of Legislative sessions only go back to 1997, so I can’t tell you what the law looked like before that mid-1970s repeal.

  18. larry kurtz 2015-05-03

    Down and out
    It can’t be helped but there’s a lot of it about.
    With, without.
    And who’ll deny it’s what the fighting’s all about?
    Out of the way, it’s a busy day
    I’ve got things on my mind.
    For the want of the price of tea and a slice
    The old man died.

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