The People's Party

State workers should pay for their health insurance

State workers should pay for their health insurance

by Heather Stancil on November 5th, 2009
 

 

Monday, November 2, 2009

2009 Interim

Opinion:
Budget reduction measure #4: Charge for state employee health insurance

By: Ed Failor, Jr., President of Iowans for Tax Relief
Date: Monday, November 2, 2009

Last week, the possibility of renegotiating the current state employee pay contract was discussed by Governor Culver. However, neither the Governor nor the employee unions have stated they intend to reopen the current contract, an action which should happen without delay.

The opportunity for more budget savings is within the State Employee Collective Bargaining Agreement. While I have already suggested the Governor implement a state employee pay reduction, the issue of health insurance for state employees should also be addressed.

Right now, all state employees with a single coverage health insurance plan, and many state employees with family coverage pay no premium. This is an interesting contrast with Iowans employed in the private sector. According to the Agency for Healthcare Research and Quality, single Iowans in private sector establishments contribute an average total of $756 toward their health insurance premiums annually and Iowans with family coverage contribute an annual average of $2,524.

Our state employees receive a tremendous benefit, which is a huge cost to Iowa taxpayers. Currently, state employee health insurance premiums cost taxpayers over $300 million each year.

The state-run hawk-i program, which is designed to provide health insurance coverage for lower-income Iowa children, requires families to pay a monthly premium based upon their income. Some lower-income Iowa families pay as much as $40 a month for hawk-i coverage for their children.

There is something wrong with the system when families on the hawk-i program are paying more for their children’s health insurance premium than our well-compensated state employees are paying for their own.

Governor Culver and the unions should renegotiate health insurance benefits for state employees. I propose state employees chip in a share of the cost of their health insurance. If 50,000 current state employees were to pay $40 a month for their health insurance premium, this would result in an immediate budget savings of $24 million.

A savings of $24 million would go a long way in preventing the potential layoffs in the Department of Corrections. Given the choice to pay $40 a month for health insurance or head to the unemployment line, I’m certain many workers would choose to pay this small part of their health insurance premium.

Asking state employees to fund a portion of their health insurance premium seems only fair when lower-income Iowans are paying up to $40 a month for hawk-i, just to have their children covered. While many Iowans are out of work, struggling to put food on the table, and paying for their health insurance, it is a small thing to ask of our state employees to pay a portion of their own health insurance premium.

It is time our state government begins to operate more effectively and efficiently. The way out of the budget crisis is to change the way the state is run, not use scare tactics and send more Iowans to the unemployment line.

Governor Culver, while you are meeting with the unions, please keep these two things in mind: It is time to align state worker pay with private sector pay, and it is time to ask state employees to pay a portion of their health insurance premium. Iowa taxpayers expect better from their government.

 

Cites

Agency for Healthcare Research and Quality, Medical Expenditure Panel Survey. Table II.C.2 (2008) Average total employee contribution (in dollars) per enrolled employee for single coverage at private sector establishments that offer health insurance by firm size and State: United States, 2008.

Agency for Healthcare Research and Quality, Medical Expenditure Panel Survey. Table II.D.2 (2008) Average total employee contribution (in dollars) per enrolled employee for family coverage at private sector establishments that offer health insurance by firm size and State: United States, 2008.

http://www.hawk-i.org/en_US/costs.html