Skip to main content
You are the owner of this article.
You have permission to edit this article.
Board approves state worker health care cuts

Board approves state worker health care cuts

  • 0
Scott Walker

Gov. Scott Walker, shown speaking during the state Republican Party convention in La Crosse on Saturday, proposed $81 million in cuts to state worker health benefits.

State workers’ main out-of-pocket health care costs will double next year, after the Group Insurance Board approved changes Tuesday to save $85 million over two years.

The cuts, to begin Jan. 1, were requested in Gov. Scott Walker’s proposed budget and are designed to avoid a “Cadillac” tax on rich benefit programs from the Affordable Care Act.

The changes affect some 240,000 employees and family members in the $1.4 billion state worker health insurance program, most of whom live in Dane County.

Much of the proposed savings, $52 million, will come from increasing out-of-pocket limits and introducing deductibles for the vast majority of state workers who don’t have them.

Out-of-pocket limits will go from $500 to $1,000 for single coverage and $1,000 to $2,000 for families. Deductibles will be $250 for individuals and $500 for families.

Jon Litscher, insurance board chairman and a retired school superintendent, proposed removing the deductibles, which are expected to save $20 million next year.

Litscher said similar savings could come from a planned restructuring of the tiers that determine employee premiums for various HMO plans. That change is expected to save $10 million to $20 million next year, though it wasn’t included in the $85 million in estimated savings, according to Atlanta-based Segal Consulting.

Board members approved Litscher’s amendment 6-4, with one abstention.

But then several board members said the tier structure savings are in question because they depend on negotiations with the HMOs. Litscher withdrew his amendment.

The board approved the changes as originally proposed, 9-2. Opposed were Litscher and Herschel Day, who teaches math at UW-Eau Claire.

The other approved changes include replacing 10 percent coinsurance with co-payments of $15 for regular doctor visits and $25 to see specialists. That is expected to save $24 million over two years, state officials said.

Some $12 million in savings will come from increasing the patient cost of prescription drugs from a maximum of $50 to a maximum of $200.

End-of-life care consultations, also called advanced care planning or palliative care, are expected to save $292,500.

Some changes will cost money, such as covering habilitative services, which help people gain or maintain a new function.

Also adding cost, at least initially: increasing the state’s contribution to health savings accounts from $170 to $750 for single coverage and $340 to $1,500 for families.

That change could encourage more people to sign up for high-deductible health plans, which is expected to save money long-term, officials said.

Walker’s budget called for $81 million in savings over two years. The approved changes, at $85 million, are designed to escape the “Cadillac” tax that starts in 2018, said Lisa Ellinger, insurance administrator for the Department of Employee Trust Funds.

The changes likely will achieve that goal, but it’s not certain, said Ken Viera, a consultant with Segal.

“All of these elements reduce your exposure,” Viera told the board. “Nothing eliminates it.”


Be the first to know

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Related to this story

A State Journal investigation shows members of Gov. Scott Walker's administration pushed for a loan to a troubled company whose owner had cont…

Get up-to-the-minute news sent straight to your device.


News Alerts

Badger Sports

Breaking News