By Jason Stein, Milwaukee Journal Sentinel
MADISON - Scott Walker's proposal to overhaul public workers' heath care came under scrutiny Tuesday as lawmakers cast a critical eye on the GOP governor’s budget proposal.
The Legislature's budget committee opened a week of hearings on the budget bill Tuesday, with lawmakers praising parts of the budget but also singling out provisions to put off maintenance on state roads and buildings and overhaul the way the state insures its employees.
Both GOP and Democratic lawmakers questioned the governor's plan to use $60 million in savings from that coverage overhaul to help pay for K-12 school spending.
"I feel like you're backing us into a corner," Rep. Mary Felzkowski (R-Irma) told Walker appointees at the meeting.
After hearing from the Walker administration this week, the Joint Finance Committee will hold meetings around the state in the coming weeks to hear from ordinary state residents and will then start to rewrite the two-year, $76.1 billion budget bill. Walker's proposal combines $593 million in tax and fee cuts with more money for K-12 schools and the University of Wisconsin System.
State Administration Secretary Scott Neitzel defended Walker's proposal to shift the state to a self-insurance system to cover employee health care costs and said that in most cases state and local employees would still be able to see their current doctors. He said that given the fact that Obamacare's repeal is now uncertain at best, Walker's proposal could save an additional $22 million in federal taxes included in the Affordable Care Act.
"So from a cost perspective, a beneficiary perspective, a market perspective, and ultimately a budgetary perspective, self-insurance makes perfect and simple sense," Neitzel told the budget committee.
But some fellow Republicans on the committee have rejected the change in the past and again on Tuesday questioned whether the proposal could generate the savings Walker is counting on.
Rep. John Nygren (R-Marinette), co-chairman of the Joint Finance Committee, questioned whether the proposal might actually cost money. He pointed to figures showing that the state of Georgia ended up paying more money on a switch to self-insurance after the current consultant to the state of Wisconsin, Segal Consulting, had said that the change would save Georgia money.
State Employee Trust Funds Secretary Bob Conlin said that he was also skeptical of the savings at first but that the ones being presented to lawmakers now are based on binding bids by insurers, not projections.
"We believe those savings are reasonable," Conlin said.
Rep. Katrina Shankland (D-Stevens Point) also asked how many state employees would end having to change insurance plans and doctors. Lawmakers pointed to a January letter to Walker in which executives of Group Health Cooperative, a health plan currently serving state workers, said that self funding proposals "risk loss of choice and disruption of the doctor-patient relationships established between state program participants and (Group Health) doctors and staff."
Neitzel said that some workers would to have change health care providers but most would not.
The state's current approach gives employees a choice of health-maintenance organizations aligned with local providers. That forces them to compete on price and quality, particularly in the Madison area.
Under a self-insured program, the state would pay the actual cost of providing health care to its employees, instead of paying premiums to HMOs. The state and its employees would routinely set aside money — similar to premiums — to cover those costs.
The state Group Insurance Board has approved a switch to self-insurance, but lawmakers would need to sign off on it for the change to take effect.
Some GOP lawmakers praised the budget.
Sen. Luther Olsen (R-Ripon), a former school board president, said that he hadn't held a budget hearing in his district before because in recent years he wasn't "real thrilled" with state budgets. Now he's happy to hold one because of the $649 million increase in K-12 school funding over the two years, he said.
But some Republicans on the committee like Rep. Mark Born (R-Beaver Dam) questioned whether the budget would do enough to address maintenance called for on state buildings and roads. Born said the University of Wisconsin has estimated that delaying maintenance now would mean paying $60 million more for the same work in the next budget.
Nygren noted he had once put off replacing the roof on his home and later regretted the decision when it leaked.
"Is it wise to defer maintenance...if it's needed?" he asked.
Neitzel said the state budget bill would meet the state's maintenance needs "in the context of our ability to pay."