State Workers’ Pay Faces Budget Pinch On Top Of Losing 2 Percent Pay Raise, Workers Must Foot Higher Health Costs
The take-home pay of Idaho’s 18,000 state workers not only isn’t rising this summer, it’s going down when the new budget year begins July 1.
If seeing state lawmakers stiff them on Gov. Phil Batt’s proposed 2 percent pay raise was not enough, state employees and their 22,000 dependents are going to have to foot about $4.5 million in higher health care costs.
Increases in health care costs are an annual occurrence. But this is the first time in over a decade that state workers have had to absorb them without some kind of accompanying pay raise.
“This one is kind of like a double whammy,” said Donna Van Trease of the Idaho Public Employees Association.
Employee stress has been rising, Van Trease said, because the governor’s campaign to check the growth of the state labor force while holding the line on other spending has increased the work load for many, and “this is just one more thing.
“When you don’t give a salary increase for buckling down and doing more, then it’s kind of like telling them they’re really not worth what they’re getting now,” she said.
Lawmakers were advised early last winter that medical insurance costs would be going up another 5 percent. The analysts now believe it will be more like 7.5 percent - something over $4 million.
But the Legislature, concerned that Batt’s revenue estimate was too optimistic for the state’s slower economic growth and worried about paying for potential spring flood damage, declined to provide any additional state cash for the medical insurance increases.
That was on top of its decision against putting up the $16 million to finance the governor’s proposed pay raise. Legislative leaders predicted - to some skepticism - that state employees would ultimately receive pay hikes from savings on a payroll Batt has already said has been trimmed of all fat.
Those financial manipulations left the state Office of Group Insurance scrambling to cover the increase. Officials decided agencies could squeeze $30 per employee out of existing budgets to come up with about $540,000 of the extra money.
But employees will cover the rest through substantial increases in their co-payment for prescription medicine.
They have been paying $6 for a generic prescription and $14 for a brand name drug. In July that will go to $10 for generics and $35 for brand names in what Group Insurance Manager Cynthia Ness acknowledged was an attempt to reduce the state’s excessive use of brand names by getting more workers to use cheaper generic drugs when possible. The increased employee cost is expected to be $3.5 million.
In addition, workers will shell out another $1 million for dental coverage $3 a month more for single-person coverage and $11.48 a month more for family coverage.
There is also a $2 to $4 a month increase, depending on the type of coverage, in the employee share of the premium for the low-deductible medical plan, which is used by less than half the work force. Premiums are unchanged for the higher-deductible option.
“We’re doing the best we can to hold costs down to employees,” Ness said. “There were some very difficult decisions. And regardless of what decisions we make, we aren’t going to be able to accommodate everybody, and there are going to be somebody or somebodies who are unhappy about the changes.”
The alternative, she said, was to hike deductibles and out-of-pocket costs for each covered employee.
The state is still paying about $50 million of the annual health care bill for its workers. But the employee share that has been around $6 million to $7 million a year will jump to $11 million at midyear.
Still, Van Trease said the entire situation has intensified interest among workers in joining and becoming more involved in the employee association.
“They don’t have a salary increase to help offset this,” she said. “Employees are starting to see a need to be part of a group to fight this kind of battle.”