Darling and Nygren

Sen. Alberta Darling, R-River Hills, and Rep. John Nygren, R-Marinette, co-chairs of the state Legislature's budget committee, said Monday they will find $60 million in budget savings from state worker benefits in lieu of shirting to self-insurance.

A “modest” increase in deductibles, expanded wellness incentives and excess reserve funds could let Wisconsin save $60 million from state worker benefits without shifting to self-insurance, leaders of the state Legislature’s budget committee said Monday.

Sen. Alberta Darling, R-River Hills, and Rep. John Nygren, R-Marinette, reaffirmed their opposition to Gov. Scott Walker’s plan to move 250,000 government workers and family members away from a program in which the state pays premiums to 17 HMOs.

But the co-chairs of the Joint Finance Committee said they’re committed to finding $60 million in savings Walker counted on from self-insurance in the 2017-19 budget. One step, they said, is to tap reserves from state worker benefits — which reached $144.4 million last year, $18.4 million to $68.8 million more than the range allowed, the nonpartisan Legislative Fiscal Bureau reported last week.

“Is it because they’re overcharging?” Nygren asked at a Wisconsin Health News forum. “Are there built-in savings that are already there that aren’t being realized?”

Darling said benefits can be redesigned to save money, such as offering more incentives for healthy behaviors. The last state budget called for $85 million in savings from state worker benefits, prompting the Group Insurance Board to add deductibles, increase co-payments and boost out-of-pocket limits.

To save $60 million without self-insurance in the upcoming budget, the state would have to make workers pay 18 percent of their premium, up from 12 percent, or increase deductibles and out-of-pocket maximums by $1,000 for individuals and $2,000 for families, according to Segal Consulting, which was hired by the state Department of Employee Trust Funds.

Nygren, who works as an insurance agent, said he disagrees. “Just with a simple, modest deductible increase, there’s potential to see significant savings there,” he said.

The fiscal bureau report — which put the base savings from self-insurance at $47 million over two years, not $60 million as estimated by Walker and Segal — prompted Darling and Nygren to call for an audit of state worker benefits.

On Monday, they said they will again seek broad oversight of the benefits program. Two years ago, Walker vetoed a bill to let the budget committee have significant oversight, letting it only approve or deny self-insurance contracts.

Walker also vetoed a measure that would have given the Legislature more say over appointments to the 11-member Group Insurance Board, controlled by the governor.

With the budget committee poised to vote down Walker’s self-insurance plan after a hearing next week, Darling said the governor may be more open to allowing more oversight now.

“He’s learned that he’s a partner with us,” she said.


David Wahlberg is the health and medicine reporter for the Wisconsin State Journal.