Free ‘perk’—or insure 75,000 kids?
By Gary Fineout and Carol Gentry
5/56/2009 © Health News Florida
If highly paid state employees contributed to health insurance premiums at the same rate as lower-paid rank-and-file workers, the state would save $45 million in the coming year.
And if that $45 million were applied to the Healthy Kids program, it would draw down federal match to total $143 million – enough to cover 75,000 uninsured children. Florida has one of the highest rates of uninsured children in the country.
But during budget discussions last weekend, lawmakers gave no serious thought to abolishing free health insurance for 26,000 state workers, the top state senator on budget negotiations said.
Why? Because lawmakers wanted to keep their own free health insurance, Sen. J.D. Alexander, R-Lake Wales, said. “Aside from me and one or two others,” he said, the idea was not well-received. Senate Democratic leader Al Lawson of Tallahassee was one of the few who voiced support.
“I think the general gist is that folks, particularly the legislative branch, weren’t making a lot of money anyway and that was a way to make it work a little better,’’ said Alexander. Lawmakers are paid roughly $30,000 for what he called “essentially a full-time job.’’
But legislators’ pay is an exception. The average income of the state workers who get free health insurance – those classified as “select-exempt” or “senior management” -- is much higher than that of the workers who have to pay premiums, according to data from the Department of Management Services.
Career service workers earn about $34,500, on average, while select exempt employees average about $53,500 and senior management about $109,400.
The two latter groups were given free insurance long ago – when it was much cheaper – to compensate for the fact that they can be fired. Career service employees have more job protections.
Career service workers pay $50 a month in premiums for individual coverage and $180 for family plans. The actual cost of the health coverage is much higher; the state pays most of it, including a $9 million premium increase for next year.
The $66.5 billion spending plan that lawmakers reached agreement on and will vote on later this week requires higher taxes and fees, freezes financial aid for college students, and cuts the salaries of all state workers making more than $45,000 by 2 percent. The salaries of state lawmakers will also be cut by 7 percent.
Those salary cuts will save just over $30 million. That’s much less than the $45 million the budget would have gained if the loophole in the health-insurance coverage had been closed.
Rep. Marcello Llorente, R-Miami, a top budget negotiator for the House, said it would have been wrong to force employees to pay for health insurance at the same time their pay was being cut.
“It’s either a pay cut and or you hit health insurance – and so we decided we’ll absorb the health insurance cost,’’ said Llorente, an attorney who acknowledged that he gets the free state health insurance. “We just did a balancing act and we prioritized and it was less of an impact on families by doing a 2 percent cut.’’
But Llorente also said Monday that a looming deficit in the state health insurance trust fund may force lawmakers to soon reconsider the free coverage. State estimates in February concluded that the state employees health insurance trust fund will have a $118.8 million deficit by July 2011 and that number will balloon to $449.6 million by July 2012.
Sen. Michael Bennett, R-Bradenton, a millionaire electrical contractor, called free health insurance an “unbelievable great perk” and said that both he and his wife are enrolled. But he added that legislators, other state employees and members of the U.S. Congress should probably be required to pay something for their health insurance to understand what it’s like for small employers and workers across the state.
“The Legislature and Congress would feel different if they had to stroke a check,’’ said Bennett, who requires the employees at his electrical contracting company to pay for their health insurance. “Make them write their own check so they can feel the pain.’’
--Contact for Gary Fineout and Carol Gentry.