The Florida Squeeze: How A National Healthcare Cost ‘Crisis’ Is Playing Out In The Sunshine State’s Classrooms

A new survey paints a stark national picture of what EdSurge’s David Weldon reports is a growing “crisis” of healthcare costs on School District budgets.

The survey from AASA, The School Superintendents Association, and the Association of School Business Officials International (ASBO) is summarized in the report “Rising Premiums, Falling Opportunities.” 

The numbers are hard to ignore. Of 767 District leaders surveyed across 42 states, 98% said rising healthcare costs are hitting their budgets in a measurable way. During the 2025-26 fiscal year, 92% of Districts spent up to 30% of their operating budget just on employee insurance benefits.

The coping mechanisms are telling: 46% of Districts have altered employee benefit packages, 34% have delayed hiring, 31% have cut instructional materials or technology spending, and 28% have reduced coverage levels outright. Report authors point to prescription drug costs, expensive-claim utilization and specialty drugs such as GLP-1s as the biggest cost drivers.

Nowhere does that national story map more precisely onto real District budgets than in Florida. Almost line for line.

Start in Orange County. District officials there have warned that without significant changes, the self-insured health trust fund serving Orange County Public Schools (OCPS) teachers and staff faces a shortfall of roughly $145 million by 2027. To manage it, the District has proposed cutting its menu of health plans from four down to two — higher deductibles and out-of-pocket costs for the employees who remain.

Ashley Modesto, an Edgewater High School teacher, said her family’s coverage cost her about $4,754 this year — and that the District’s proposal would push that to roughly $13,500 next year.

Contract talks between OCPS and its teachers union reached a formal impasse in April over pay and steep insurance cost increases. A hearing is set for this month. That is the AASA/ASBO “benefit package modification” and “coverage reduction” categories, playing out in a single Central Florida District.

Two hundred miles south, Broward County Public Schools is running its own version of the same playbook, compounded by enrollment decline. Facing an $80 million shortfall, the District has closed six schools, cut 1,000 positions to save $54 million, and plans to eliminate 2,000 more jobs over the next two years.

On top of that, teachers received no raises this contract cycle and must begin paying into two of the District’s three health plans for the first time. Only the lowest-tier plan remains free.

The teachers union has argued insurance costs aren’t the actual driver of the District’s financial problems. The Board moved forward anyway, citing the need to close the gap somewhere. This is the national “delayed hiring” and “benefit modification” findings, stacked on top of a District already cutting positions for unrelated budget reasons — exactly the compounding effect the study’s authors warned about.

The pattern repeats at smaller scale elsewhere. Sarasota County Schools cut 136 teacher positions this year, citing declining enrollment plus rising costs for health insurance and utilities. Its top-tier PPO plan, once free to teachers, now costs $200 a month.

In Palm Beach County, Superintendent Michael Burke has warned staff that anticipated layoffs would strip away not just paychecks but the health coverage tied to those jobs. In Florida’s public schools, healthcare and employment security are functionally the same line item.

If the District-level stories sound like the national survey with Florida ZIP codes attached, two statewide dynamics explain why the squeeze is sharper here.

The first: teacher pay is already at the bottom. Florida ranks 50th among states for average teacher salary for the third straight year, according to National Education Association data — about $18,000 below the national average. Premium increases eat into a thin paycheck fast.

The second: the insurance market is separately under stress. Florida Office of Insurance Regulation data shows sharp premium increases for 2026 hitting the 4 million-plus Floridians on Affordable Care Act (ACA) marketplace or small-employer coverage, with small-group premiums rising from an average of $728 per person in 2025 to $821 in 2026.

And Florida has more ACA marketplace enrollees than any other state. Statewide healthcare inflation isn’t just a School District problem; it’s a backdrop pushing costs up across every employer-sponsored plan in the state, Districts included.

Then there’s the Legislature’s own budget crunch. Florida’s $114.5 billion 2026-27 budget passed only after a contentious Special Session, while enrollment declines cost districts like Orange County a projected $27 million in state funding. Small wonder Florida Superintendents describe healthcare costs as compounding, not standalone, pressure.

That mirrors what David DeSchryver, Whiteboard Advisors’ senior vice president and co-director of research, told EdSurge: “If it were only healthcare costs, we wouldn’t hear about it, but it’s not. It’s healthcare costs, plus operational costs, plus gas and transportation, plus salary-schedule pay raises, plus rising special education and clinical service needs, and on and on. All of these are magnified by flat or declining revenues.”

None of this is inevitable, though. The report highlights Montana as a rare success story.

After one District there was hit with a 72% single-year premium spike, a coalition helped pass legislation creating a unified statewide school-employee health insurance trust. Ultimately, 180 Districts and more than 16,000 employees joined — enough scale to negotiate materially better rates with hospitals and providers.

In recent months, a Florida-based health insurance trust known as the Florida Educator Health Trust (FLEHT) has been addressing this problem by pooling together districts to gain needed buying power to negotiate better rates on prescriptions and stop-loss insurance. To date nearly two dozen School Districts have joined the Trust and are already yielding savings in the tens of millions of dollars — without compromising healthcare access for employees.

Add it all up and the AASA/ASBO study’s national numbers — rising premiums, benefit cuts, hiring delays, instructional spending squeezed — read almost like a table of contents for what’s already happened in Orange, Broward, Sarasota and Palm Beach counties over the past year.

Florida’s added pressures — bottom-tier teacher pay, a stressed insurance market, a Legislature that just barely finished its own budget — suggest the state isn’t just following the national trend. In several respects, it’s living out one of the more acute versions of it.