This was reported in dozens of media outlets around the state this past week, but I didn’t see anything in the Milwaukee media…what’s up with that? If any of our perceptive readers saw something locally, I’d appreciate a link.

But Governor Walker is proposing paying state employees $2,000 if they opt out of the state health insurance program:

As a potential cost-saving measure, Gov. Scott Walker is proposing that state employees be offered a $2,000-a-year incentive to opt out of the state’s pricey health insurance program.

Only about 5 percent of state employees currently opt out, generally because they have coverage under a spouse’s health-insurance plan, a study by Deloitte Consulting found. Another 10 percent must opt out because their spouses are also employed by the state of Wisconsin, according to the state-commissioned study.

As of last summer, the state health insurance plan covered about 62,339 state employees and their families.

If offered a $2,000 incentive, an additional 1 to 5 percent of employees might opt out, the company projected.

Quite frankly I wouldn’t think $2,000 would be enough for a state employee to find his or her own insurance outside of the government’s group health plan. I am not sure that it would even cover the increase in premiums for a second person added to a spouse’s plan at another employer. And it certainly wouldn’t be a big enough incentive for a state employee to opt out if they had a plan that covered a spouse or family.

And quite frankly there are few private employer plans that provide the coverage and cost benefits that the state provides. So what does the governor actually think he’s doing?

And we just missed the open enrollment period for the Affordable Care Act for 2015. I can’t imagine the governor would want his constituents to go uninsured, would he? (sarcasm). Or be penalized for not carrying insurance.

And then there is the extended issue…you have to pay all of those who are currently opting out…so if he doesn’t meet his target of new employees opting out of the plan…it could actually cost the state money:

About 3,300 employees who currently opt out — and receive no inducements — would qualify for $2,000-a-year payments. Deloitte said the financial impact of the incentive program would range from costing $4 million more (emphasis mine) a year to saving the state $18 million a year.

BTW: some sample outlets that carried this story:
The Journal Times
Insurance Journal
Fort Mills Times
Green Bay Press Gazette Oklahoma? Really?

7 Responses to Walker To Tempt State Employees To Drop State Health Coverage

  1. The math on this is screwy; that’s all I’m going to say.

  2. Joanne Brown says:

    Given the state’s recent record on making payments when due, I’d want that $2000 in hand before I signed in the dotted line.

  3. BobJ says:

    Socialized medicine is what the left wants for this country so the unions shall have socialized medicine and stop abusing taxpayers

    • EmmaR says:

      Paying a public employee $2,000 to not use the health plan is socialized medicine? How? Or is this about Obamacare? In which case your comment still doesn’t make sense as it’s an odd sort of socialism that puts private health insurance firms in charge. But since you are apparently a beleaguered taxpayer, you’re totally disgusted with the Governor’s mismanagement of Wisconsin’s finances, right?

  4. Cindy V says:

    Is that $2000 a year or just $2000 which might cover one year? Also, until the U.S. Supreme Court rules on the ACA, I wouldn’t be too ready to drop my insurance. Imagine thinking you can insurance for $2000 a year or less then having to all of a sudden pay more. This is not a good deal for state employees.

    • Ed Heinzelman says:

      It’s $2,000 per year. But who can trust them to continue paying after a few years and then keeping everyone off of the insurance?

  5. Dr. Morbius says:

    I think you are missing the obvious. The current op-outs are at a natural equilibrium; people look at having two insurance plans, the premiums involved and faced with the required co-ordination of benefits between the two plans (remember failure to knowingly disclose another insurance provider under a coordination of benefits rule is a felony–insurance fraud), they make their insurance decision.

    So, Walker and the GOPers obviously intend to approve this measure, and then change the goalposts; that is make the state plan the less attractive insurance plan to married couples where both are eligible for employer-provided insurance. They have already introduced a fairly unsuccessful high deductible option for all state employees (there is not enough savings to the employees to prompt very many to switch), so they can simply legislate that all state employees will be under the high-deductible option, and provide $2,000 in opt-out (about an average one month family premium when you average out all the various family medical plans–quite a small amount; and disturbingly equal to the amount the state puts into a Health Savings Account for those employees in the high deductible plan), and watch all employees with an alternative switch to the other spouse’s insurance.

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