PoliGraph: ACA may cost schools $200M – or it may not

poligraph-inconclusiveRep. Kelby Woodard, R-Belle Plaine, is concerned that the Affordable Care Act will cost schools.

In a press release, he argued that “the total unfunded costs associated with Affordable Care Act (ACA) compliance will cost Minnesota schools at least $207.96 million.”

The number comes from a reputable source, but it also comes with some important caveats.

The Evidence

There are new rules in the Affordable Care Act that affect employers, including school districts.

For instance, employers who have more than 50 employees who work more than 30 hours a week will be required to provide coverage starting in 2015 or face a fine.

Woodard worries that the requirement will cost school districts big bucks, so he wrote a bill that would require the state to reimburse schools for additional costs associated with the health care law.

Minnesota Management and Budget also looked into how much it would cost the state to provide those reimbursements, and found that it would take roughly $207 million out of the state’s coffers between fiscal years 2015 and 2017.

That said, the estimate comes with some important caveats.

Because there is no state-level data on health insurance costs or projected costs for school districts, MMB had to survey schools, and 22 responded. Of them, nine said the health care law’s new mandates wouldn’t cost them anything.

The school districts had to make a number of assumptions about those costs that may or may not turn out to be true.

For instance, districts assumed that newly covered employees would choose the lowest cost plan. Other districts indicated that they would be scaling back hours to keep some employees under 30 hours a week. It’s also possible that some employees won’t take advantage of new coverage opportunities because they get insurance elsewhere.

The analysis is so fraught with uncertainty that MMB wrote (and underlined for emphasis), “The actual amount of Affordable Care Act aid that would be paid to districts will vary from the amount listed in the table.”

The Verdict

Woodard’s number comes from a reasonable source. But it’s an estimate, and MMB makes clear that the actual amount of aid the state would be on the hook for if Woodard’s bill passed could be lower or higher, depending on the circumstances.

The best PoliGraph can do with a statement that relies on so little hard information is rate it inconclusive and wait for more data.