October 21, 2009 in Idaho

Otter defends health insurance cut

By The Spokesman-Review
 

BOISE - Gov. Butch Otter is defending a move to sharply increase health insurance costs for part-time state employees, even though some will face premiums that exceed their take-home pay.

“This is the same thing the city of Boise does, the University of Idaho does, every company in the private sector that I know of, does the very same thing,” Otter said Wednesday. “If you’re a part-time employee, you receive part-time benefits. So I say we’re being competitive with the marketplace.”

Since he became governor, Otter has been pushing to raise state workers’ pay while cutting benefits, to make their compensation more like the private sector. But the state’s economic downturn has put the brakes on any pay increases; rather than raises, state workers these days are seeing furloughs and other cutbacks.

Nevertheless, Otter’s director of administration, Mike Gwartney, is pushing forward with the benefits change for part-time employees, effective Nov. 1. Those who can’t afford the new premiums can drop health insurance. The House and Senate Democratic caucuses sent a letter to Otter this week formally requesting the governor to delay the move, but he said Wednesday that he won’t.

Otter said some part-time state workers with employed spouses are choosing the state insurance plan over the spouse’s employer’s plan. “They … elect to take for their family the state insurance because it’s so much a better package,” Otter said.

Senate Minority Leader Kate Kelly, D-Boise, said, “I anticipate that we’ll have discussion about this in the legislative session - we’re going to have to. There will be an opportunity at that point to either revisit it or reformat the changes, if the will is there to do that.”

Some part-time state employees will see their monthly premiums rise from $30 to $300, or 900 percent. According to guidance distributed to state agencies, if an employee’s wages for the pay period are less than the premium, “the Office of Group Insurance will contact the employee and the applicable agency’s Human Resources to make the necessary adjustments.”

In their letter to the governor, the House and Senate Democrats warned that any savings the state sees from the move likely would be be eaten up by increased costs in Medicaid or the Catastrophic Health Care fund, as newly uninsured workers turn to public assistance. “Rather than shifting insurance costs onto workers who can ill afford them, efforts should be made to use the State’s bargaining position to lower State government’s health care costs as a whole,” they wrote to the governor. “You are in a critical position to lead such an effort and we encourage you to do so.”

Dozens of Boise State University employees, many of whom work full-time but only for 10 months of the year and now are being classified as part-timers, deluged lawmakers last week who came to their campus for the interim meeting of the Legislature’s joint budget committee with complaints about the move.

Legislative budget analyst Keith Bybee reported to the committee that state agencies will save a total of $2.7 million from the move, but only about $900,000 of that is in state funds. Many of the employees who submitted letters to JFAC noted that their jobs are funded by federal grants; the cut in their benefits would simply mean more money to be spent elsewhere in the grant program, rather than saving any state tax money.

Kelly said lawmakers have been hearing “just these awful stories” from the affected part-time state workers. The Democrats’ letter to the governor, she said, “is 25 legislators saying, ‘This isn’t the best policy, in terms of the execution and what’s being done here.’ It’s just frightening for these families.”

After the Joint Finance-Appropriations Committee heard Bybee’s report, Co-Chairman Dean Cameron, R-Rupert, said, “Obviously that will be a discussion item in this next session.”


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