State employees and
teachers have ObamaCare to thank for new health care cost sharing in a bill
moving through the General Assembly. Senate
Bill 265 enacts much of what Gov. Bev Perdue included on health insurance
in her budget proposal earlier this year, which should result in her signing
the bill over the objections of her fellow Democrats.
Two things cloud the picture. First, SB265 would add premiums for every
employee, not just those in the more generous plan. Second, Gov. Perdue has
taken a strongly partisan approach to legislation this year, so no matter how
much overlap there is between her plan and the legislation, she may veto it.
Health insurance plans must forever stay almost exactly as they were on March
23, 2010, or adopt all of the costly mandates ObamaCare adds to insurance
plans. There is a one-time exception that allows slightly higher copays and
premiums this year, and SB265 takes advantage of nearly every opportunity to
share costs with teachers and state employees.
The State Health Plan has suffered from rising costs and deficits, including a
rapid reversal from a $25 million surplus to a $400 million shortfall in 2009.
For the July 2011 – June 2013 biennium, Plan administrators forecast a $500
million shortfall in current costs. To prevent future surprises, the Plan
should move to consumer-driven policies with either a Health Reimbursement
Arrangement (HRA) or a Health Savings Account (HSA) to pay for care.
These policies have lower premiums and are proven to lower the cost of care
while generally maintaining or improving the health of enrollees. Moving to a
consumer-driven plan, however, would not qualify as an acceptable change under
ObamaCare. Instead, state employees are stuck paying premiums for the first
time ever, higher copays (which do not count toward a deductible), and the
great likelihood that the state will soon not be able to afford the policy
without significant changes that deprive the Plan of its protected status and
mean even higher costs for teachers and state employees.
So state employees must pay more now and likely even more later, when the real
"benefits" of ObamaCare kick in for their insurance policies. If this
happens in 2013, employees could have as little as six months of this more
expensive coverage before the governor or state legislature decide that it is
cheaper for the state and better for employees to stop providing insurance, pay
the employer penalty per person, and send state employees into the
federally-subsidized health insurance exchange.
A few years ago, the John Locke Foundation gave employees the choice of a
certain level of salary and a higher deductible for their health insurance or
less salary and a lower deductible. Employees who get their insurance through
the Locke Foundation unanimously chose higher salaries and less generous
insurance. Complaints from the state teachers’ union (NCAE) about higher
premiums indicate that teachers would make the same decision if they could.
ObamaCare’s rules make this difficult if not impossible.
SB265 is about the best solution the federal law allows. Instead of directing
their anger at Republican legislators or Gov. Perdue, state Democrats should
focus their fire on repealing ObamaCare before it breaks the budget and the
State Health Plan further.
The bill also makes the State Health Plan, which has had little oversight from
the legislature, an executive agency under the State Treasurer.
