SALEM - Round 3 of the fight over whether to consolidate health insurance for the employees of Oregon's 198 school districts got under way at the Capitol Thursday, with members of the Senate Education Committee voting along party lines to send the proposal to the full chamber.

Legislators fought over the proposal in the 2003 and 2005 legislative sessions, and it is a pet cause of Democratic Gov. Ted Kulongoski, whose administration says a statewide health care pool for educators could save $270 million over the next five years.

But the plan has met fierce opposition from the Oregon School Boards Association, which runs its own health insurance trust, covering about 64 percent of Oregon's school employees. A portion of the fees paid by districts to be a part of that pool goes to the association's operating budget.

The school boards association has argued that, far from saving money, the new Oregon Educators Benefits Board will cost taxpayers millions of dollars, if the cost of the current health insurance pool for government employees is any indication.

Legislators, as in previous years, said Thursday that they feel caught in the middle of dueling data, in the absence of an analysis from a truly neutral observer. But Education Committee member Rick Metsger, D-Welches, nevertheless urged his colleagues to vote to advance the bill, saying, “If we have a reasonable opportunity to save money, it is incumbent upon us to take the leap.”

During the 2005 legislative session, the bill was bottled up in the Republican-controlled House. This time around, though, Democrats are in control of both chambers, and its fate may be different, especially with the average health care costs for teachers projected to rise about 8 percent a year for the next five years, from $800 a month today to $1,175 a month by 2012.

Under the proposal sponsored by Sen. Ryan Deckert, D-Beaverton, the new Oregon Educators Benefits Board could chose a single insurer or a consortium of insurers, or choose to self-insure, state officials said.

Local school boards, education service districts and community colleges would continue to negotiate with employees over who pays what percentage of health insurance costs. Backers say the plan would cut back on administrative costs, and that built-in safeguards would ensure that no district would pay higher rates than under their old plans.

The state's teacher and school employees unions have sided with the governor's office, saying that similar pools in a dozen other states, including New York, California and Texas, have successfully saved money that can be used elsewhere in a school, whether to hire more aides or provide extra classroom materials.

But Kevin McCann, executive director of the school boards association, argued that a better parallel was to look at Oregon's current Public Employees Benefits Board, for state workers. Providing health care for a single employee under that plan costs $724.83, he said, more than double the $333.45 the school boards association pool spends on a single teacher's plan.

In response, James Sager, the governor's education policy adviser, said the school boards association plan includes a $100 deductible, and lacks coverage of asthma, diabetes, mental health and heart disease management programs.

In testimony, Sager also took a veiled shot at the OSBA, saying, “We can make it clear that Oregon's students and not a special interest group should benefit from the dollars spent in our education system.”

Local school districts seem divided over the proposal.

Some say they worry about a loss of local control. Thomas Grimsley of Bethel wrote to the committee urging that districts that have worked hard at crafting their benefits packages be allowed to opt out of the state pool.

Others, like Patrick Munyon of the Eugene schools' human resources office said a pool would put an end to ever-rising deductibles, co-payments and out-of-pocket maximums.

----

The measure is SB 426. Information about 2007 bills and laws in Oregon: http://www.leg.state.or.us/bills_laws/