Wisconsin?s health insurance choices
Will state and local governments in Wisconsin scale back the post-retirement health insurance help they have provided for their workers?
Unions had negotiated the premium help, but collective bargaining has all but been wiped out in Wisconsin. Public employers now generally can set the terms and conditions for fringe benefits.
The average retirement age for those in the Wisconsin Retirement System, the central public-employee retirement program, has hovered in the early 60s. The programs helped bridge the gap until Medicare kicks in at 65.
But the Affordable Health Care Act (Obamacare) now also promises to bridge the gap for everyone, including those who can’t work until age 65 or need to retire to help care for ill spouses or elderly relatives. Obamacare individual policies go on sale this week for use in 2014.
“One of the largest uninsured populations right now is the 55-to-65 year-olds who may not have affordable coverage through their jobs,” says U.S. Health Secretary Kathleen Sebelius.
Nine million Americans between 50 and 64 years old were uninsured in 2010, according to the AARP Public Policy Institute. Older Americans are more likely to have expensive preexisting conditions like diabetes and heart disease which drive up potential premium costs. The new law eliminates the premium cost of preexisting conditions.
Reliable estimates indicate that from 9 percent to 10 percent of Wisconsin residents lack private or public health insurance. However, our state is among the states with the highest percentages of health-insurance coverage even though Wisconsin’s population is older than the national average.
The numbers fluctuate as employment changes. Also affecting the uninsured numbers are Obamacare provisions already in effect, especially allowing young people to stay on their parents insurance until age 26.
State government is the biggest employer in the WRS system, and its program allows workers to convert their unused sick leave into health-insurance premiums. There are millions of hours in the sick leave banks of state employees.
Most state civil service workers get 16.25 days of sick leave annually. That was provided in negotiations in the mid-1990s with the administration of Republican Gov. Tommy Thompson. It won Thompson the election year endorsement of the largest state employee union.
Financially troubled Detroit and Chicago have proposed ending health-care benefits for current or retired workers, saying they will be able to buy subsidized health insurance through the Obamacare programs.
Curbing incentives to early retirement is a two-edged sword. Older workers are more costly to employer health-insurance plans, and younger workers usually get paid less than those retiring.
Much of the opposition to Obamacare has come from those already on Medicare. The new law seeks to control Medicare costs by curbing payments to providers and insurers. Conservative talk radio has pushed the theory that fewer doctors will see older patients, but the New York Times recently reported more physicians are agreeing to see Medicare patients.
Medicare patients won’t see any surprises when 2014 arrives, according to Gerry Smolka, a policy expert at the AARP Policy Institute. “Medicare has not been radically altered. This is the same for you as it was last year,” he told the New York Times.
A number of bills have been drafted by Wisconsin legislators to place limits on the fringe-benefit system for public employees. It’s doubtful that any action would come before the winter session early in 2014.
Legislators who might want to scale back the existing fringe benefits probably would cite the Obamacare alternative available to all citizens. They may argue that public employees don’t need anything more than is available to all citizens.
There is some irony if the Obamacare-impact argument is pressed by Republican legislators. Tea Party Republicans in the House of Representatives say their goal is to stop the Affordable Health Care Act implementation by halting its funding, even if it means shutting down the federal government.
Matt Pommer’s column is provided by the Wisconsin Newspaper Association.