Re: the Milwaukee County Obamacare escape route
posted at 6:39 pm on October 1, 2013 by Steve Eggleston
Ed covered the meat of Milwaukee County Executive Chris Abele’s plan to (at least potentially) dump all 4,400 employees onto PlaceboCare as part of his 2014 budget plan. I don’t think it will be quite $10 million in savings though there will be savings, and the local unions can’t really do anything about it here.
First things first, Milwaukee County government, since Scott Walker became governor, has become a full-fledged three-ring circus. The Executive and the Board are officially non-partisan offices, which explains the lack of political identification of Abele as he never served in office as a Democrat, but both are dominated by liberal Democrats.
The odd thing is, even though he is on any other given issue a card-carrying liberal, Abele has continued Walker’s tradition of submitting budgets that do not call for increased property taxes from the prior year. The Board, as it has done every year except one under Walker, added spending and taxes by a veto-proof margin, though not as much as they really would have liked as many of those on the board remain from the 2000 version that passed a pension sweetener deal that is still costing the taxpayers tens of millions of dollars a year.
As an aside to the current story, the third ring is Sheriff David Clarke, who due to the facts that county sheriff is one of the few county offices that is a partisan office in Wisconsin and the state parties have no special control over who runs under their banner, is titularly a Democrat. The Democrats have tried and failed to primary him out every election since he became sheriff back in 2002 during the fallout from the aforementioned pension scandal, and Abele and the Board mostly see him as a common enemy to be vanquished by any means necessary, but those are items for another time.
Back to Abele’s idea. He claims that providing “subsidies”, really pay increases so he doesn’t have to go hat in hand to the Obama administration for the same exemption from the no-employer-subsidy law Congress got, for the employees to purchase insurance on the PlaceboCare exchanges will save the county $10 million per year. Even though the county is expecting to otherwise pay UnitedHealthCare nearly $14,000 per employee next year, I somehow doubt the math will work to that extent. After all, the not-exactly-functional exchanges will charge Wisconsinites some of the highest premiums in the country, with the “silver” plan having a Milwaukee-area retail (i.e. pre-subsidy) price of just over $11,000 per year for a family of 4. There are also open questions of whether units of government will be charged the $3,000 per employee
tax fine other large employers not offering health insurance will eventually be charged and whether, to make it tax-“neutral”, the county can offer “pre-tax” dollars.
Even though earlier rumblings out of the Board had been negative toward this idea when it was merely a rumor floating around the courthouse, Board Chair Marina Dimitrijevic was quoted by the Milwaukee Journal Sentinel as saying she was “always interested in studying ideas that could expand health care options and produce savings.” That suggests that the Board might be on board this idea.
This is all possible without much fear of a union backlash because of 2011’s Act 10, which allows units of government in Wisconsin to dictate the terms of non-wage compensation to unions, just as they had to non-union employees. I know I’ve seen stories of other local governments nationwide at least threatening to end employer-provided health coverage, but I cannot remember what I’ve done with the links to the stories. Of note, the FY2014-FY2015 state budget did not take health insurance benefits away from state employees even though most of the same Republicans who passed Act 10 passed that budget.
Act 10 also forced WEA Trust, which had almost exclusively dealt with school districts, to begin courting other units of government with health insurance as their outsized premiums from exclusivity clauses written into WEAC locals’ contracts expired. Even though WEA Trust had a rather slick ad campaign that included sponsorships of the local pro and college sports teams’ radio broadcasts, I have not seen too much evidence that it was successful.