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Walker’s self-insurance plan rejected by budget committee (UPDATE)

SCOTT BAUER

Associated Press

MADISON (AP) — 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 strongly 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 spending, roads and taxes. The panel wasn’t taking up any of those matter Thursday, but, in addition to self-insurance, it did plan to vote on prison-related matters, including a proposal to hire more guards at the troubled Lincoln Hills youth center.

Walker has been lobbying for his self-insurance proposal, under which state workers and their families would be  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 change could result in higher premiums and not as much savings to the state as Walker had projected and could 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 would lead to steep premium increases of 10 percent 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, the total cost to the 250,000 public workers and their families now covered under the existing plan — including premiums — could not increase by more than 10 percent in each of the next two years, committee co-chair Rep. John Nygren said Thursday.

Walker had counted on the $60 million that he believed would be saved by the change to self-insurance to pay for salary increases for University of Wisconsin workers and to increase spending on 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.

The state’s current budget runs through the end of June, but the government won’t shut down even if Republicans who control the Legislature can’t reach a deal by then. Instead, current funding will continue until a deal is reached. Assembly Speaker Robin Vos said Wednesday he doesn’t expect the budget to pass before July 1.

Nygren said he thought Senate and Assembly Republicans are closer on a deal on education than on transportation. Darling said the budget committee could meet again next week to vote on K-12 schools and taxes.

 

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