Public Workforce

Shifting The Burden of Benefits To Public Employes

In the face of unprecedented budget shortfalls and escalating health care costs, states and localities are cutting back on employee benefits, particularly health insurance--increasing co-payments for doctor visits and raising monthly premiums and deductibles.
by | June 2003

In the face of unprecedented budget shortfalls and escalating health care costs, states and localities are cutting back on employee benefits, particularly health insurance--increasing co-payments for doctor visits and raising monthly premiums and deductibles. Unions representing Baltimore fire fighters, for instance, recently agreed to a contract that nearly triples their health care premiums.

These actions do not sit well with many public employee groups. "Simply raising deductibles and co-pays does nothing to alter a structure that produces 15 percent a year cost increases" in health care, says Steven Kreisberg, of the American Federation of State, County and Municipal Employees. "It's just who's going to be paying. Bosses are looking at us and saying it's your turn to bear the burden."

Some jurisdictions are experimenting with more ambitious changes. Wisconsin's Group Insurance Board, for example, recently approved a plan to create a three-tiered health insurance system for state employees. Nonunion employees who enroll in the "Tier One" plans--the plans the state determines are most efficient--will have to pay a monthly family premium of only $62.50. Employees who enroll in the least efficient plans will find their share of the monthly premium is $250. The state will do its own risk assessment of insurance plans. The goal is to punish inefficient health plans and slow cost increases in the state.

John Buntin
John Buntin  |  staff writer
jbuntin@governing.com  | 

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