Otter defends insurance costs

BOISE – Gov. Butch Otter is defending a move to increase health insurance costs sharply 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.”

Otter has pushed to raise state workers’ pay while cutting benefits to make their compensation more like that in 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 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 that he delay the move, but Otter 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 legislators will probably discuss the issues in its upcoming legislative session. “There will be an opportunity at that point to either revisit it or reformat the changes, if the will is there to do that,” she said.

Some part-time state employees will see their monthly premiums rise to $300 from $30.

In their letter to the governor, the House and Senate Democrats warned that any savings the state sees from the move likely would 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. “You are in a critical position to lead such an effort and we encourage you to do so.”

Legislative budget analyst Keith Bybee reported to the committee that state agencies will save $2.7 million from the move, but only about $900,000 of that is in state funds.

Many of the employees who submitted letters of complaint to the Joint Finance-Appropriations Committee 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.