States, School Boards – Cutting Benefits

I need a new drugI came across two interesting articles recently.  Both concerned health plans sponsored by government.  First, the State of Nevada, which is facing a shortfall of over $110 million just to support existing benefits for its employees, slashed benefits dramatically AND increased the employees’ share of premiums.  Here’s what they did: They got rid of almost all dental and vision benefits. Cleanings and x-rays are still covered and an annual eye exam is covered, that’s it.  They also took an axe to the medical insurance.  Here they raised the employee deductible from $800 to $2,000 for individuals and $4,000 for families.  Out of pocket maximums increased to $3,900 for individuals / $7,800 for families.  Co-insurance, the amount the plan pays after the deductible is met, fell from 80% to 75%.  They also cut the state-paid life insurance benefit for employees from $20,000 to $10,000.  Doing all of that, they managed to save $80 million dollars.  The other $30 million will be paid for by state employees in the form of higher premiums.  Got that?  The state was short on funds so they cut benefits AND raised employee premiums.  Needless to say, this is NOT going to be considered a grandfathered plan.   State of Illinois employees better take note.  Our state is in even worse financial shape and most State of Illinois employees get a plan that costs them $47 – $85 per month with a deductible between $300 – $450.   Those are nice benefits at very little cost to the employee.  Don’t get used to them however, you state government workers.

The second story concerns the Milwaukee area school district.  Facing budget shortfalls, the district gave layoff notices to over 400 school teachers in June.  Back in 2005, in order to save money, the district cut one benefit from the health plan.  They excluded erectile dysfuntion drugs (e.g. Viagara) and saved over $200,000 that year.  This year, the teacher’s union has filed suit to get jobs back AND to get their e.d. drugs back.  Adding e.d. prescriptions back to the plan is estimated to raise costs by more than $750,000.  Sure, that’s a drop in the bucket for a health plan that spent over $1.3 billion dollars last year, but the district does need to cut expenses.  Adding a million bucks back to the budget is going the wrong way.  Besides, wouldn’t the union want some of those jobs added back over getting their little blue pills? 

So it’s not just private employer health plans that are hurting.  As taxpayers, we should all be aware of what public employees (state workers, teachers, police, fire, village officials, etc) get for benefits.  After all, we are paying for them.

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