Self insurance proposal met with skepticism at Capitol - WKOW 27: Madison, WI Breaking News, Weather and Sports

Self insurance proposal met with skepticism at Capitol

Posted: Updated:

MADISON (WKOW) -- Governor Walker's plan for putting money back into public education is being met with skepticism at the Capitol, even by those in his own party.

"One area to consider for real reform is the way we administer health insurance for state employees, which some experts believe could save tens of millions of dollars," Gov. Walker announced in his State of the State address to the legislature Tuesday night.

He followed up that statement with a big promise.

"Tonight, I commit to investing every penny of savings to the general fund from these specific reforms to support public education," said Gov. Walker.

That specific reform is self insurance.

"The state itself would kind of become it's own insurance company. And by doing so it then takes on all of the liability and litigation costs that come with insurance," explained Kevin Binversie of the conservative group Right Wisconsin.

Currently, state employees pick from a variety of health plans offered by 18 different insurance companies. Its a system the Senate co-chair of the Joint Finance Committee believes in.

"We have to look at the impact of self insurance on the free enterprise system and our health care system today, because our health insurance system is one of the best in the country," said Sen. Alberta Darling (R-River Hills). "We have to make sure we don't impact the competition, the free enterprise market in health care. Just like Obamacare has not proved to be costs savings, or if you like your doctor you can keep your doctor. So I think people are very much concerned about change right now."

Under a self insurance system, the state would hire one insurance company to administer its plan.

"It's definitely a long-term, marathon-type policy," said Binversie, who supports the idea in theory. "That's the problem is trying to explain this as 'we do this now it costs this.' Ten years down the road versus what's now in place it would be immense savings."

To start a self insurance plan the state would have to triple it's cash reserves, according to a report commissioned by the Wisconsin Group Insurance Board last year.

That likely means the process couldn't begin for at least a year, because of new Legislative Fiscal Bureau projections which show Wisconsin's budget surplus is now expected to be just $70 million at the end of current biennium in July 2017. Lawmakers originally believed the surplus would be $165 million.   
Kevin Binversie and Scot Ross of One Wisconsin Now will debate the merits of self insurance on Capitol City Sunday at 9:00 a.m. on WKOW 27.

Powered by Frankly