The Governor’s health plan for public employees: A solution in search of a problem

We’ve seen this before; why would we try it again?

DSCN5662-detail240200Governor Branstad’s plan to remove health benefits from negotiations on state, county, city and school employee contracts presents more questions than answers.

The first question: What again is the problem? The Governor has not identified one with any specificity.

The second: What would be the effects? Local decisions on health care coverage reflect local realities; the Governor has not shown why a statewide plan would (1) cover employees adequately; or (2) save a dime.

And perhaps the most important: We’ve seen this movie once in the last year with the Governor’s Medicaid privatization, and many would have preferred to walk out. So why would we go again?

Perhaps we need to take a deep breath and study the issue first.
The Governor is giving us a solution in search of a problem. There is no problem. He has not identified one — just vague and unsubstantiated concerns that won’t be repeated here because they are vague and unsubstantiated. You have to do better than that, Governor.

Next, we have no specifics from the Governor about his suggested statewide pool — who would run it, what options employees might have, not even what it would cost, or any idea about where the costs would be greater than they are now.

We do have experience with that, in this Governor’s unilateral decision to privatize Medicaid, which has been both costly and disruptive thus far. This experience leaves a serious question whether the state should be rushing into another big change with health coverage that would affect as many as 1 in 7 workers in the state, with no more study than has been apparent.

In fact, according to the Des Moines Register, a big issue with the Governor is making employees pay a greater share of their health costs. What is missing from that concern is the fact that employees have given up pay increases through the years in negotiating the health-benefit arrangement. Will the Governor be permitted to ignore this?
For good context, our 2011 report “Apples to Apples” demonstrates that benefit packages move public employees closer, on average, to the overall compensation of private-sector employees with similar skill sets — though still below private-sector compensation.

If the Governor’s goal is to reduce state expenditures by reducing public employee health benefits or increasing the employee share of costs, it should be recognized that this would widen the compensation disadvantage already experienced by public sector workers.

Many public employers — school districts, etc. — like the ability to offer something that might not cost as much as a straight pay increase, and that is a benefits package that includes health insurance. Where employers and employees agree on such a package, why would the state object?

A responsible approach by legislators would keep all of these considerations in the forefront in discussing any such changes to employee benefits.

owen-2013-57Posted by Mike Owen, Executive Director of the nonpartisan Iowa Policy Project.

Contact: mikeowen@iowapolicyproject.org

Author: iowapolicypoints

The Iowa Policy Project is a nonprofit, nonpartisan organization that provides research and analysis to engage Iowans in state policy decisions. We focus on tax and busget issues, the Iowa economy, and energy and environmental policy. By providing a foundation of fact-based, objective research and engaging the public in an informed discussion of policy alternatives, IPP advances effective, accountable and fair government.

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