Insurance could shift for state employees

Walker’s self-coverage plan may affect 250,000

MADISON - After years of skepticism, lawmakers must now decide on Gov. Scott Walker’s plan to save at least $60 million by restructuring health insurance for some 250,000 government employees and their families.

The Republican governor wants the state to shift from a model in which the state pays premiums to private insurers to cover state and local employees. Instead, the state would pay the workers’ health care costs directly.

But the co-chairwoman of the Joint Finance Committee sent a clear message Monday that she’s not on board with Walker’s proposal, saying she hasn’t seen enough evidence that it will deliver long-term savings.

The state also shouldn’t act while Congress is still considering a repeal of the federal Affordable Care Act, the health care law often called Obamacare, Sen. Alberta Darling (R-River Hills) said.

“I think this is a very risky plan to switch,” Darling said. “I’m just not convinced.”

Walker and state agencies have been studying the change since 2012 and the plan is now before the budget committee, which has 21 days to decide whether to object to it.

“Since taking office, we have sought to reform government to make it more accountable and cost effective to the hard-working taxpayers,” said Walker, who wants to plow the self-insurance savings into education. “Moving to self-insurance is one of these reforms and we urge the Joint Committee on Finance to approve these contracts and invest these savings into the classroom.”

The state’s current approach gives employees a choice of health-maintenance organizations aligned with local providers. That forces them to compete on price and quality, particularly in the Madison area.

Under a self-insured program, the state would no longer pay premiums to HMOs. The state and its employees would routinely set aside money — similar to premiums — to cover workers’ health care costs.

That would eliminate some of the profits that the state currently pays to insurers, though the state would continue to work with a smaller number of private companies to administer the program.

John Shiely, the former chief executive officer of engine maker Briggs & Stratton, released a column Monday through the Walker administration praising the proposal. Shiely, who cochaired a government efficiency commission for Walker, said that most private companies and most other states use self-insurance as a way to save money.

“Unfortunately, those savings are at risk of being left behind by the Legislature,” Shiely wrote.

But Darling said the state’s health premiums only increased 1.6% this year for participants who aren’t in Medicare. She pointed out that the state abandoned self-insurance in the early 1980s after big jumps in premium costs, saying that the state’s current model encourages competition among insurers.

She said she’s still reviewing the proposal from the Walker administration but stopped just short of saying she would oppose it.