In an incredibly callous proposal, freshman County Supervisor Deanna Alexander called for a study by the county to review dropping health care coverage for the 4,400 current county employees and simply paying the federal fine of $2,000 per employee under the Affordable Care Act. She is suggesting that the county could save $103 million annually considering that the federal fines would amount to $7 million compared to the current county budget of $110 million for health care insurance.

To start with, I find her proposal unethical in the extreme. There is an implied expectation that full time employees are offered health care insurance from their employer. And certainly we’ve heard about employers reducing hours worked per week for their employees in order to avoid provisions in ACA. And there have been rumors of employers doing exactly has Sup. Alexander is suggesting but I haven’t seen any actual proof of that.

Obviously I am not an expert on the ACA but find it hard to believe that it was meant to apply to state and local governments. Of course this couldn’t even be an issue if it weren’t for Act 10. In the normal course of contract negotiations, government employees would negotiate the terms of employment including health insurance coverage. But Wisconsin no longer exists in that real world so nonsense like this can rear its ugly head.

Now, in normal circumstances this would be a joke as well. Employers look at health care costs while setting salaries and wages when making hiring and employment decisions. Most employees who have health insurance look at it as a free perq of the job and don’t know the half of what it costs their employer. But salary or wage plus benefits is what the employer considers as payroll costs. So, how much does it cost your employer to provide you with health insurance? In the past with the exception of a few enlightened employers, this has been essentially a state secret. But this year, if you take a peek at your 2012 W-2, in one of the box 12 (mine is in box 12C), you will see an amount preceded with the code DD that tells you what it costs your employer for your health insurance coverage. It is eye opening (mine is $8,561 and that’s for single coverage).

Where am I going with this? Well I would expect that if an employer is going to drop provisions for employee health care and expect the employee to purchase it on their own, that the employees annual salary or wage be increased to the amount that the employer would save in the cost of health care coverage. This is where Sup. Alexander is grasping at straws…even though Act 10 may technically allow something like this, employee salaries would need to rise to cover the loss of income…that is if the county wants to retain any skilled staff. After the previous cuts to income effected by Act 10, there are very few employees who could take another $8,000 per year hit!

And can the county pay $2,000 in fines per employee and increase wages sufficiently to maintain county services at the same time and still save money?

Side note: considering the Sup. Alexander didn’t seem able to send out emails last week without help or permission…where in hell is she finding the gall to make a call like this?

7 Responses to Whither MKE Cnty: Sup Alexander Suggests Dropping Employee Healthcare

  1. John Casper says:

    Thanks Ed.

    ACA was another victory for the health insurance oligopoly. It forces folks to buy LOUSY coverage. That was why so many of us wanted a “PUBLIC OPTION.” That would have provided C-O-M-P-E-T-I-T-I-O-N.

    “Public option,” would have been a buy in to Medicare.

    Cigna, Blue Cross/Well Point and the rest of the oligopoly want to skim the cream from the young and the healthy’s premiums. Then, as they get old and sick, they “socialize” their risk onto the taxpayers via Medicaid and Medicare. ACA requires them to pay a small fine to declare a “pre-existing condition,” so they have zero risk.

    The whole point of capitalism is that reward FOLLOWS risk. The reason Adam Smith, Thomas Jefferson and so many others pointed out that monopolies/oligopolies were the enemies of “free markets,” is because they “socialize” all their risk onto the taxpayers.

    In the 21st century, health insurance oligopoly offers zero value to patients. They’re simply a tax on consumers and most of the revenue goes to the top executives. Physicians, hospitals, nurses, allied health professionals, Big Pharma, and medical device makers really deliver value to patients. Moving to single-payer/aka Medicare-for-all would reward those groups and foster competition among them.

  2. Scooter's an Idiot says:

    I know some cities in WI have threatned to do this also. To employees with or without bargaining rights still allowed to them.

  3. Jake formerly of the LP says:

    Well this is something you’d do if you didn’t care about the people who provide services to keep the County moving on a daily basis. I’m actually OK with the ACA being a back-door public option (I think the competition should drive costs down, as insurance companies would want to keep the big Milw County contract), but as Ed points out, single-payer is a much better situation for all involved.

    I’ve also heard rumblings from other organizations that they may go this route, and pay the freeloader tax. I guess that’s their choice, but good luck keeping any employees without paying them a whole lot more than you’re paying now.

  4. yoSAMite says:

    Milwaukee County needs to explore all options, even if you find them “unethical”. There are many questions concerning ACA and I expect the proposal by Supervisor Alexander will be the norm, not the exception.

    • Ed Heinzelman says:

      yaSAMite. I have no way of knowing if you have employer provided health care or not…but if just before the next enrollment period, your employer stated, we are taking the $2000 fine and here’s the url for the insurance exchange, we wish you good luck and we aren’t increasing your compensation a lick, you are going to accept that as an ethical practice?

  5. Cat Kin says:

    The President wants the Insurance companies to play with the government. This may indeed be naive, but if industrialists can do it well, so can insurers. This would be the best solution for reducing the overall cost of healthcare to individuals, as insurers would be more motivated and better able to shop for and regulate economical healthcare solutions. It would also offer competition if the government could regulate colusion (oligarchy) among insurers. It would reduce the fear of government control over individual health by spreading the responsibility to the private sector.

    There are many ways that the cost of healthcare can be greatly lowered through technology and record management as well as knowledge and equipment sharing. There’s no reason the cost of healthcare could not be reduced on a scale comparable to Moore’s law. This is what frightens many in the investment community, who depend on healthcare as a cash cow and political controlling factor.

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