“We’re at a breaking point”: Rapidly increasing health insurance costs put stress on negotiations
As health care costs continue their exponential climb, this issue has emerged as one of the top priorities of Education Minnesota members, according to a recent poll conducted by the union.
Now, as locals bargain new contracts, members are feeling the effects of those skyrocketing health insurance costs at the negotiating table. The Minnesota Educator spoke with four locals from across the state to understand the breadth of the problem and its impact on contract negotiations. What we found is that while the details of negotiations look different for each one, the underlying issue remains the same: health insurance costs are increasing at an unsustainable rate.
Rate increases by district
Over the past year, many locals have seen double-digit premium increases on their health insurance. Some examples include:
- South Washington County – 23%
- Anoka Hennepin – 22%
- Austin – 24%
- Dakota County United Educators – 18%
- New Ulm – 24% (54% increase last year)
- New London-Spicer – 39%
- Eastern Carver County – 20%
- International Falls – 20%
- Kingsland – 20%
- Albany – 20%
- Lyle – 59%
- Watertown 37%
- Dover-Eyota – 29%
- Nicollet – 20%
- Hayfield – 20%
“Even at the top of our salary schedule, a single parent can qualify for MNsure.”
— Anoka Hennepin
Anoka Hennepin Education Minnesota is the largest local in the state. Representing more than 3,000 educators, it covers a wide swath of the north metro. AHEM President John Wolhaupter said that health insurance costs have been a big part of negotiations for the past couple bargaining cycles. He said AHEM was prepared to focus this round of negotiations on salary improvements but had to change their plan when they saw their premium increases.
Wolhaupter said that the dramatic increase in cost also forced AHEM members to make tough decisions about coverage—people switching to plans with higher deductibles and lower coverage, switching from family coverage to single coverage, moving their dependents off AHEM insurance and on to programs like MNsure—to try and save money. “[This especially impacts] single parents,” Wolhaupter said, “Even at the top of our salary schedule, if you’re a single parent, you can qualify based on the unaffordability of our health insurance.”
With so many people switching out of the plan, the pool of insured individuals is weakened, driving up costs long-term and exacerbating the problem. During the eight months that AHEM members were working without a contract, they felt the full impact of increases—up to $400 a paycheck—with no raise. The astronomical cost of health insurance was a major reason why 98.5% of AHEM membership voted to authorize a strike, which was set to begin on Jan. 8. However, on Jan. 7, the local and the district were able to reach a tentative agreement. As this issue goes to print, that agreement has not yet been ratified.
“We are going to lose our small rural districts.”
— Lyle
Lyle is a small district in southeastern Minnesota, near the Iowa border. The local affiliate has around 30-35 members and is facing a 59% increase in their health insurance costs this year. Educators who take family insurance pay upwards of $1,000 a month for health insurance, even with the district contributing $2,700 towards costs as well.
Agriculture teacher Jym Hansen says that Lyle educators are sacrificing pay gains for health insurance. “The district doesn’t want to…freeze pay,” he said. “But they can’t pay us what they want to because of insurance costs.”
He says the frustrating part about this situation is that district leadership and the local affiliate are on the same side. Hansen says he’s pushing members to get involved in advocacy at the state level because the system needs to change for the district to receive relief from crushing health care costs. He is also a Health Care Action Leader—a member whose role is to mobilize colleagues in their district to advocate for Education Minnesota’s Educator Group Insurance Plan, which would implement one large pool for public school employees.
“There are no good outcomes here—we’re just trying to find the least bad outcome for our employees,” Hansen said. “If we do not get these health care costs under control, we are going to lose our small rural districts.” Lyle has already lost many veteran teachers because their families can’t afford health insurance on their teaching salary. That lack of affordability, combined with the other stresses of teaching, is driving educators out of the classroom. “There is not much more stress this system can take,” he said. “We’re at a breaking point—and something has to change.”
Hansen said that surrounding locals have attempted to create a regional version of EGIP in the past, but they were not able to get the program up and running. Consequently, he is encouraging colleagues to turn their focus toward the Legislature to advocate for EGIP. “We have to get the Legislature to take this seriously,” he said. “We need to push for EGIP, but we also need to push for more oversight on hospitals and health insurance companies.”
“I just would like to see something more affordable.”
— New London-Spicer
New London-Spicer is a small district in central Minnesota, about 90 miles west of the Twin Cities. Erin Schoumaker, negotiations team member for Education Minnesota New London-Spicer, said that health insurance costs tend to be the second most important concern, following pay. In recent years, premiums have increased significantly—in 2025, they saw a 39% spike. As a result, the district has bounced between health insurance carriers. “We’ve been jumping around to wherever we can find the best rate,” Schoumaker said.
She said that their negotiations team decided to focus on a salary increase so that they can better afford the increased premiums, but they are still requesting an increased contribution from the district towards health insurance. “We talked it over and decided that focusing on a salary increase that can better allow members to cover health care costs made the most sense,” she said.
Schoumaker said that several members have had to leave the profession because of the cost of health insurance, particularly for employees who take family insurance. “They literally wouldn’t get a paycheck,” she said. “I just would like to see something more affordable,” she said.
“Everyone understands the system is broken.”
— Chaska
Chaska, situated in the southwest metro, has about 700 active members. Sarah Rother, vice president of the Chaska Education Association, said that one struggle they’re facing is that claims have increased as members have aged and needed to use their health care benefits more frequently.
Like in Lyle, Chaska local leaders and district leaders are on the same side of the issue. Rother, who has been on the bargaining team for over a decade, explained, “We’re all in agreement that we have to do something [to bring down the cost and increase the quality] of insurance.” Rother said that the negotiation team’s focus has been to try and minimize the loss in pay due to increasing health insurance costs. Despite a strong and collaborative team at the negotiating table, Rother described a feeling of helplessness because there does not seem to be a solution. “Everyone understands the system is fundamentally broken,” she said, “but [what can the 11 of us in this room] do about it?”
Rother said they have been encouraging members to turn their frustration into advocacy by sharing their stories with elected officials. “The system is so broken that we have to leverage political action and have our voices heard in a bigger way,” she said. “Directing their anger at [district leaders who are on our side] won’t help.”
Members’ concerns and priorities regarding health care have changed as costs have increased. Like most locals, CEA distributes a survey to members ahead of each bargaining round. “It used to be that on the survey, people would say that they’re willing to pay more for top-quality insurance,” said Rother. “But now people are saying, ‘just give me basic insurance. I’ll take less coverage, just don’t charge me more.’”
She said that while people aren’t leaving the district purely because of health insurance costs, it’s definitely a major factor when Chaska educators are considering a career change. “I think the number one driving factor is burnout, but part of what causes burnout is stressing over health care costs or foregoing care because you cannot afford it,” Rother said.
She explained that many members in the local recognize that many of their cost concerns would be alleviated by a much larger pool, which is EGIP’s primary goal.
Conclusion
Spiraling health care costs are causing strain at the bargaining table, exacerbating burnout and contributing to educators’ decisions to leave the classroom. As we outlined in our legislative agenda, we believe that the most effective way to bring down health care costs for educators is through passage of our one large pool plan (EGIP), bringing every public school employee in Minnesota into one insurance pool.
For ways to get involved in advocacy, check out the “At the Legislature” section of our website, www.educationminnesota.org/advocacy/at-the-legislature/#legislative-action.
