The health insurance program for Arkansas’ public school teachers needs an injection of cash, and the clock is ticking. That was the message heard during testimony by members of the Arkansas State House and Senate education committees on Monday, August 3.
Patrick Klein, Vice President at the consulting firm the Segal Group, told lawmakers that the insurance program reserves will experience a deficit of $31 million (projected) for 2027 [@ 1:17 PM of video recording/hearing].
Worse, if no action is taken, that same fund “will be depleted by 2029.” As Klein explained to the committee on a video conference call, “We have 22%, 23%, all the way up to 27% increase in expenses, for 2029. And, it’s not just one, one lever it’s really all pieces of the program, medical expenses are up 15%, we’ve had a large spike in the MA premium, and pharmacy costs continue to surge.”
Klein said the funding gap will have to be closed with increases to contributions either from the state, individual school districts, or from employees.
School districts already contribute the largest share, providing $217 million in funding in 2026 to the overall $510 million health insurance fund for public school teachers. Employees contribute $151 million, while the Department of Education provides $142 million.
Klein suggested two scenarios, the first of which would increase contributions by school districts by 21.3% each year until 2031. The second plan would call for a 12.5% increase by each of the three groups.
But there was push back by lawmakers on adding that extra financial burden on small and rural school districts. And the same reluctance was heard in asking teachers to do the same.
South Arkansas State Rep. Jeff Wardlaw, R-Hermitage, says the size of the current predicament was avoidable. [@ 1:40:47 PM] “But when you forego a session, two sessions, is what we did, you’re going to see these huge cliffs or huge increases because if you’d done it incremental [sic] it would have been small and it would have played up through. But we didn’t do that because the budget was okay and tax cuts were more important at those times.”
The Arkansas Department of Education says it is monitoring the situation and working to support teachers as lawmakers continue searching for a solution. A follow-up meeting is scheduled for later this month.
