Walker says no decision made on state insurance

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Associated Press
Wednesday, October 2, 2013

MADISON, Wis. — More time is needed to study options about whether it makes sense to shift state employees from health maintenance organizations to a state self-insured program, Wisconsin Gov. Scott Walker said Wednesday. 

Walker discussed the idea with representatives of heath care providers and insurers at a Tuesday meeting. A committee of the state’s Group Insurance Board, which oversees state employee health benefits, was set to discuss it further on Oct. 11.

At least 20 states have self-insurance programs for their employees. Under that approach, employers carry the risk for losses and pay benefits directly to employees, instead of buying insurance from the private market. In Wisconsin, the state contracts with 18 HMOs to cover its 236,000 employees and family members. 

Until more information about the pros and cons of the idea are gathered, no decisions will be made, Walker said in response to questions asked after an event at the World Dairy Expo. 

“We have not proposed a plan,” Walker said. “We may find after all that we’re going to stay with the status quo. We may find that we’re going to change. We may find some sort of a hybrid. But there have been no conclusions made in that regard.”

A report by Deloitte consultants said the state could save 4 percent to 5 percent a year by becoming self-insured, with savings mainly coming from taxes and fees imposed for fully-insured programs under the federal health care law. 

The imposition of those taxes and fees led to the consideration of the self-insurance approach, Walker said. 

“When we make this decision, we’re going to want as much information as possible and not just to get out from having to pay some of the taxes and fees under the Affordable Care Act,” Walker said. That consideration will include what impact any change would have on everyone, including small businesses, farmers and employees who don’t work for the state, he said. 

“We don’t want to do anything that would have a negative impact on the economy by negatively impacting markets, which is why I’m asking for as much information as possible,” Walker said. 

The Deloitte report said any move to a self-insured system “needs to proceed with caution,” with particular attention paid to the state’s liability to pay claims. 

“The short term ‘quick wins’ of a self-insured arrangement need to be balanced against the potential long term risks,” the report said. The soonest such a change could be effective would be 2015, the report said. 

Marty Beil, executive director of the Wisconsin State Employees Union, called Walker’s consideration of the idea a “bizarre flip flop” from a governor who rejected federal funding for Medicaid and has fought the federal health care law. 

“Now he wants to make state employees dependent on government-run health care system,” Beil said in a statement. “He wants to blow up a system that has consistently used market forces to contain costs and replace it with a government-run system.”

Beil, who served 32 years on the Group Insurance Board, said moving to a self-insured system would disrupt the patient-doctor relationship and reduce choices for state employees. 

A spokesman for Republican Senate Majority Leader Scott Fitzgerald said he had no comment on the idea because he didn’t know about it. A spokeswoman for Assembly Speaker Robin Vos had no immediate comment.

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