The column below reflects the views of the author, and these opinions are neither endorsed nor supported by WisOpinion.com.

Over the past 15 years, Wisconsin’s educational funding debates have ignored a fundamental problem: the runaway cost of employee healthcare. While Madison politicians consistently feud over state aid formulas and one-time cash injections, school districts face a losing battle against a primary driver of cost that traditional education funding cannot fix. 

This healthcare inflation acts as a massive drain on local classrooms. Over the last two decades, hospital service costs in Wisconsin surged by 260%, nearly triple the growth of the state’s median household income. 

The data shows that Wisconsin is one of the most expensive states in the country for medical care. According to hospital price tracking from the University of Wisconsin’s Crowe Center April 2026 Report, Wisconsin hospitals charge commercial insurers an average of 321% of Medicare rates for the exact same procedures. That is the highest in the Midwest and fourth-highest nationally. The situation worsens in the consolidated healthcare markets of Milwaukee and Madison, where major hospital systems routinely charge north of 400% of Medicare rates. Ironically, Act 10 gave school boards the total authority to choose insurance plans and cut benefits to save money. 

The pressure carries directly into insurance markets. According to national health benefits tracking by the Kaiser Family Foundation Market Dashboard, the average annual premium for an employer-sponsored family plan has breached $25,500—a 70% increase over 15 years. The trajectory is only steepening. For the current cycle, rate filing data from the Wisconsin Office of the Commissioner of Insurance Filing Registry shows major insurers filed for massive, double-digit rate hikes. Average statewide premium increases are hitting 16% to 17%, with individual small-group and commercial marketplace plans spiking over 30%. 

This is no longer just a medical market issue; it is a school budget crisis. Look at Milwaukee Public Schools (MPS), where financial audits show the MPS Official District Budget Profile confirms the benefit rate has climbed to 53%. For every single dollar MPS spends on a teacher’s classroom salary, it must spend an additional 53 cents on benefits, driven overwhelmingly by health insurance premiums.

Madison Metropolitan School District faces a similar squeeze. These recurring annual premium spikes regularly outpace the state’s rigid revenue limit increases.

The reality is straightforward: any new money local districts receive from the state is effectively spent on insurance premiums before a single new textbook can be purchased or a reading specialist hired. Worse yet, our current system forces Wisconsin’s 400-plus school districts to negotiate insurance plans completely on their own.

Currently rural and mid-sized districts lack the leverage of a massive corporation to handle volatile premium spikes. These districts, along with larger districts like Milwaukee and Madison, would benefit from a unified statewide pool that would replace fragmented local bargaining with massive purchasing power, forcing insurers to submit highly competitive bids and legally preventing regional hospital monopolies from price-gouging our largest educational budgets.

Consequently, districts are forced onto a referendum bailout. Voters are consistently asked to approve massive property tax hikes just to maintain basic, existing services. Communities are told these referendums are “for the kids.” In reality, a massive portion of those tax dollars simply covers the astronomical healthcare cost and the market dominance of hospital conglomerates.

Pouring more funding into the current system without addressing this structural flaw will not solve the problem. To stabilize school finance, lawmakers must look outside the traditional education budget to successful models in other states.

Several states allow or mandate public school employees to blend into a larger state employee health insurance pool. That is exactly how it works in Idaho, which passed landmark School Employee Insurance Pooling Legislation, and California, which utilizes its massive CalPERS School Purchaser Framework to control costs. Similarly, New Mexico created the Public Schools Insurance Authority Pool to centralize benefits, aggregating over 30,000 educational employees into a single, self-insured risk pool. By managing plan designs directly at the state level, they hold administrative overhead below 10% and shield local school budgets from volatile regional spikes. Meanwhile, Montana successfully curbed overcharging by implementing State Reference-Based Pricing Standards that caps what state plans will pay hospitals relative to Medicare. 

By eliminating individual district bidding, a statewide pool would immediately create massive purchasing power, level out risk for rural and mid-size communities, and legally prevent consolidated hospital systems from price-gouging local education budgets. By removing health insurance from the collective bargaining process, Act 10 actually cleared the legal path for this solution; because school boards and the state now hold centralized control over benefit structures, implementing a unified, statewide purchasing pool is logistically easier than ever before. 

Until the legislature addresses the healthcare monopolies devouring local school district budgets, any future financial compromise on school aid is an illusion. Without real medical cost control, our school districts will remain underfunded, our children will continue to pay the price, and hospitals and insurance companies will continue to increase profits.

Andrekopoulos is former superintendent, Milwaukee Public Schools.