For more than three decades, the health insurance program for state employees in Wisconsin has been called a model for other states. It relies on free-market competition to deliver extraordinarily high-quality care and, importantly, contains costs for taxpayers.
This model is under threat today because an unelected state board is pushing to consolidate and control Wisconsin public employee health insurance choices — a move that also would negatively affect the private sector.
I have spoken with retired leaders of four private-sector health insurers throughout Wisconsin, and we have seen first-hand the success of the existing state employee health program. Over the past six years, the program’s costs have increased at an average that is half that of other large employers in the state, and well below large employers nationally.
According to a state news release last August, the 2017 cost increase of 1.6 percent compares to a 6.7 percent increase for other private and public plans in Wisconsin, and a 6 percent increase nationwide.
The current program has delivered lower costs for taxpayers, quality care for employees, and a robust insurance marketplace that delivers good value to private-sector employers as well. Unlike most states dominated by one or two insurers, Wisconsin is a highly competitive market with dozens of health insurers.
All that is threatened by a proposal being considered by the Legislature’s Joint Finance Committee that would create a state-sponsored central program and displace hundreds of private-sector, Wisconsin-based jobs.
As a retired CEO, I don’t have a personal stake in the ongoing debate over state employee benefits. As a taxpayer, however, I urge the Legislature’s Joint Finance Committee to take a very critical look at the long-term impacts of the disruptive change being considered.
If the state decides to self-fund its public employee health program, the high-quality, low-cost plans offered in the private sector are also at risk. Several health plans now competing in the Wisconsin marketplace would leave. More would be forced to drastically reduce their staff. Market competition would decrease, and the state, its employees and private-sector employers would be the worse for it.
The proposed change to self-funding would move the state backward on the value-based health care continuum while the rest of the country is trying to catch-up to the model we have enjoyed in Wisconsin for decades. It is hard to believe that protecting a vibrant free market is even a debatable question in our current political environment.
I am encouraged by the thoughtful consideration under way in the Joint Finance Committee and strongly urge that this proposal be rejected once and for all.