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Walker’s self-insurance plan rejected by budget committee



Republicans not in favor because it could mean higher premiums.

MADISON, Wis. — Gov. Scott Walker’s proposed switch to a self-insurance plan for state workers was rejected Thursday in a rare bipartisan vote by the Wisconsin Legislature’s budget-writing committee, a defeat for the governor who had lobbied hard to make the change.

The Joint Finance Committee voted 16-0 to reject proposed self-insurance contracts in its first meeting in two weeks as budget talks have stalled amid disagreements over K-12 school funding, roads and taxes. The panel didn’t take up those issues Thursday, but did vote to eliminate a same-sex domestic partner registry created in 2009 and approved pay raises for state workers and University of Wisconsin System employees.

Walker has been lobbying for his self-insurance proposal, under which state workers and their families are insured by the state rather than purchasing coverage through private HMOs. The state would assume the risk for medical claims that exceed premiums.

Republicans have been cool to the idea, fearing the move could result in higher premiums, not as much savings to the state as Walker projected and damage the state’s private health insurance industry.

“This is the wrong time for us to make major shifts in the marketplace,” Sen. Alberta Darling, co-chair of the committee from River Hills, told reporters before the vote.

Walker has argued that not accepting his self-insurance plan will lead to steep 10 percent health insurance premium increases for state employees next year. The Wisconsin Association of Health Plans, an advocacy organization for 10 health plans that currently cover state workers, said that estimate was overblown.

Under the current system, total costs to 250,000 public workers and their families covered under the existing plan — including premiums — could not increase more than 10 percent in each of the next two years, committee co-chair Rep. John Nygren said Thursday.

Walker counted on the $60 million saved from the self-insurance move to pay for salary increases for University of Wisconsin workers and to increase funding for K-12 schools. The budget committee planned to recoup $63 million by tapping nearly $26 million in insurance reserves, $23 million in negotiated savings and $15 million through plan design changes and other means.

Other actions on Thursday included:

— eliminating a same-sex domestic partner registry established in 2009. Those on the registry could remain, but no new applicants would be accepted after six months. The committee also eliminated a domestic partner registry available for state employees who are same-sex or opposite sex partners. Republican backers said neither was needed because all the benefits provided under the registries are now available to anyone who gets married. Same-sex marriage was not permitted at the time the registries were created, but it is legal now.

“This isn’t personal,” said Republican Rep. Dale Kooyenga. “It’s simply an equity issue, a fairness issue.”

Democratic Rep. Gordon Hintz cautioned that there could be unintended consequences in eliminating the registries.

— providing state employees 2 percent pay raises in September 2018 and May 2019 as Walker proposed. The committee also approved spending enough money to provide 2 percent raises over the next two years for University of Wisconsin System employees, but whether that’s awarded across-the-board or in some other way would be up to another legislative panel that votes on the pay plan.

— purchasing 269 body cameras for guards at maximum-security prisons.

— hiring eight additional guards at the troubled Lincoln Hills youth prison as Walker proposed. The additional staff would be used to help the prison in Irma come closer to being in compliance with staff-to-juvenile ratios mandated by the federal Prison Rape Elimination Act. Federal law requires a ratio of 1-to-8 during waking hours and 1-to-16 during sleeping hours. Walker’s plan would reduce the average ratios to 1-to-13 during waking hours and 1-to-29 during sleeping hours. Democratic Sen. Lena Taylor argued that not hiring enough guards to come into compliance is irresponsible.

— devoting $17.2 million over two years to support 1,052 contract prison beds to house state inmates in county jails and federal facilities. That is 1,208 fewer beds than the Department of Corrections said was needed. The agency’s estimate was based on projections that tougher drunken driving penalties would create 1,421 new inmates over the next two years. Walker’s administration doesn’t believe the influx of inmates will be that steep.