Will Walker’s Self-Insurance Plan Die Today?

By James Wigderson, special to Media Trackers

The state Legislature’s Joint Finance Committee is expected on Thursday to take up, and reject, Governor Scott Walker’s plan to move Wisconsin to a self-insurance model for state employees. The Capital Times reports:

Also on Thursday, the committee will vote on contracts to approve Walker’s proposal to move state employees to a self-insurance system. The leaders of the committee have said they plan to reject the contracts.

Lawmakers have been at odds with Walker’s administration over the proposal since it was released. Walker argues the contracts will give the state guaranteed savings, but legislators including Joint Finance co-chairs Sen. Alberta Darling, R-River Hills, and Rep. John Nygren, R-Marinette, have said there’s too much risk involved in the switch.

According to the Walker Administration, the state would save $103 million over the biennium by moving to self-insurance, also known as self-funded insurance. Self-insurance means the state of Wisconsin would be responsible for paying claims instead of contracting with HMOs for insurance. Approximately 250,000 state employees and their families would be affected by the change.

Both Nygren and Darling are opposed to the state moving to a self-insurance plan. The move is also opposed by state employee unions, the Wisconsin Association of Health Plans, the Wisconsin Medical Society and a dozen other organizations, most of them connected to the healthcare industry.

Darling told the Milwaukee Journal Sentinel earlier this year, “I think this is a very risky plan to switch.”

Nygren also told the Wisconsin State Journal that he was concerned about the risks of switching. “My concern (is) the potential disruption to the private market, not just the state employee plan,” he said.

Special interests concerned about the issue have been active in contributing to both Nygren and Darling. In 2016, insurance PACs gave $2,650 to Darling and $5,500 to Nygren. Darling also received $5,023 in contributions from individuals connected to the insurance industry in 2016 while Nygren received $9,735. All figures are from the Wisconsin Democracy Campaign’s Campaign Finance Database.

“Health Services and Institutions” were also busy in 2016. Nygren received $7,800 from individuals and $5,750 in PAC money. Darling received $11,010 from individuals and nearly $3,600 from PACs.

Darling received another $11,000 from health professionals in 2016 and $2000 from PACs representing them. Nygren received $6,630 from health professionals and another $2,500 from PACS.

That brings the total amount of campaign donations from special interest categories interested in the state self-insurance issue to $35,283 for Darling and $37,915 for Nygren, according to the Wisconsin Democracy Campaign’s database. Neither legislator responded to an email asking for comment.

State Rep. Mary Felzkowski (R-Irma), a member of the Joint Finance Committee, also was the beneficiary of campaign donations, $25,985, from the previously mentioned special interest groups. However, in an interview Wednesday night Felzkowski denied that pressure from special interest groups had any impact on her decision to oppose moving Wisconsin’s state employees to a self-insurance health plan.

“I don’t think this is about outside interest groups,” Felzkowski said. “I think this is about legislators hearing from their own constituents, hearing from state employees, and just looking at this from the big picture of there is a lot of uncertainty in the health insurance market.”

Felzkowski did not rule out moving to a self-insurance model in the future, but she just couldn’t support it right now because of uncertainty of what changes will be made to the Affordable Care Act.

“I think that the disruption to the individual and commercial markets would be too great of a risk right now and too burdensome for the rest of the individuals and the businesses in the state of Wisconsin,” Felzkowski said.

Felzkowski explained that taking 250,000 public employees out of the insurance market could cause higher rates for everyone else.

“The state may realize a savings, potentially a $60 million savings,” Felzkowski said. “But I don’t think that ‘potential’ savings is worth the potential risk to the marketplace and passing it on to the consumers.”