Health Insurance Problems and Solutions in Libraries

Editor’s Note: After reading this editorial, please consider responding to the questions at the end.

Library Journal recently reported that entry level salaries for librarians entering the job market in 2004 rose by 2.91% past 2003 levels. Although this increase does not keep up with inflation, hovering around 3.5%, it is much better than the previous year (October 15, 2005 online edition). Unfortunately, from the view of many library employees this upward trend is outweighed by the dramatic rise in health care expenses.

Healthcare costs are at an apparent all time high. Although there are many factors contributing to this, the reality is that the rising cost of health services disproportionately out pace salary increases. This is a significant problem for both libraries as fiscal institutions as well as for their employees. For some libraries, health insurance premiums are increasing at a rate of 10-30% annually.

Some libraries respond to rising health care premiums by evenly sharing the expense with employees.  However, with raises limited to 2-4% and insurance premium increases of 10-30% per year the financial burden becomes untenable for many employees.  They must choose between paying the higher rates, adopting a private insurance plan, or dropping coverage altogether. Libraries must offer benefit incentives beyond standard health and dental plans in order to remain competitive employers.

High health insurance costs may force less career-established librarians out of the profession and into more financially lucrative fields like database design and knowledge management. This would cause a technology brain drain in libraries. Those with transferable skills may choose to leave.

This also hurts the library’s ability to retain coverage for remaining employees because when employees can no longer afford to use library sponsored health insurance the employer may lose some negotiating power when dealing with its insurer. Libraries must therefore walk a thin line by either covering an appropriate percentage of health insurance relative to the employee’s income or offer new incentives to keep the library an attractive employer.

There are two main health insurance products: traditional health insurance that includes a higher monthly premium with lower out of pocket costs for actual medical care and the newer health savings account that has a low monthly premium but a high deductible that includes a tax sheltered savings account. Another option might be that libraries, which are used to collaborating, create a national library health insurance consortium that would negotiate a group health insurance rate.

The problem is somewhat similar to journal and database access prices. In a good year, budgets will grow by three or four percent. And yet journal and database access may increase by ten or fifteen percent annually. It is difficult for libraries to simply go without research journal access. Going without journal access in a library is not unlike going without health insurance for the employee. Each is critical to the mission and daily operation of libraries.

I hope others with more expertise than this librarian will share ways of overcoming this very important issue.

Do you have ideas? Does your library offer innovative plans to address rising health care costs?

Jon Goodell is a Reference and Interlibrary Loan Librarian at the Central Arkansas Library System in Little Rock, Arkansas. He graduated from the University of Missouri—Columbia School of Information Science and Learning Technologies in 2005.