State employees have always described it as a trade-off: They work for lower pay than private-sector workers in return for good benefits -- including a generous health-insurance plan.
But with the state facing massive budget problems, Republican leaders want to squeeze tens of millions of dollars out of the insurance plan for state workers, retirees and their family members.
Gov. Rick Scott has proposed increasing premiums for state retirees and eliminating a break that allows many elected and appointed officials to pay only pennies on the dollar for coverage.
And in Scott's most far-reaching proposal, he wants to begin giving employees flat amounts of $5,000 each to buy health insurance starting in January 2013. That would save the state more than $7,000 for each employee who has family coverage --- and likely push many workers into high-deductible insurance plans.
No choice, leaders say
House and Senate leaders have not endorsed any detailed proposals for revamping the insurance system. But Senate Budget Chairman JD Alexander, R-Lake Wales, said Wednesday that lawmakers likely will have little choice but to tighten employee pay and benefits because of a roughly $4 billion budget shortfall for the coming year.
Alexander and Senate President Mike Haridopolos also said they think state workers receive better insurance benefits than comparable private-sector employees at a time when many businesses are cutting insurance costs.
"We want to make sure our health-care benefit package is more in line with the private sector,'' Haridopolos said in an interview this week.
A flat $5,000?
Scott's proposal to start giving employees a flat $5,000 each year would fall in line with that philosophy. The change likely would lead many employees to couple high-deductible plans with what are known as "health savings accounts,'' which are increasingly being used by businesses.
Employees would build up money in those accounts, which have tax benefits, and use it to pay routine medical expenses such as costs of doctor visits. The high-deductible insurance then would cover catastrophic expenses.
The advantage of such a plan is that it would have lower upfront costs. But employees also could find themselves getting hit with large out-of-pocket expenses if the health-savings accounts do not build up enough money.
Doug Martin, a lobbyist for the American Federation of State, County and Municipal Employees in Tallahassee, said he expects lawmakers to make significant changes in health benefits this year. But they need to make sure they understand the potential ramifications, he said.
"Our issue is that we want to make sure people can go to the doctor, that they will not be bankrupted if they have a child with cancer and that the benefit is affordable,'' Martin said.
State pays most of workers' premiums
The state plan, which gives employees the choice of enrolling in health-maintenance organizations or a preferred-provider organization, covers about 375,000 workers, retirees and family members. It is expected to cost about $1.9 billion this year, with most of the costs paid by the state.
For instance, family coverage for a typical state worker costs $14,920 this year, with the state picking up $12,760 of that total, according to information presented to Alexander's committee Wednesday. Single coverage costs $6,597, with the state paying $5,997.
What about retirees?
Early retirees also can buy coverage through the plan, though the state does not pay any of their premiums. Similarly, retirees on Medicare can pay to get coverage, which serves as a primary insurance for prescription drugs.
Despite the retirees covering their entire premiums, state officials say the payments are still not enough to cover the seniors' health-care costs --- effectively leading to subsidies from other members of the health-insurance plan.
That led Scott to propose increasing retirees' premiums to the levels that actuaries say would be needed to cover those costs. In all, that would be a $61.5 million boost to the state plan during the next two years, according to the information presented to Alexander's committee.
But Martin and Senate Minority Leader Nan Rich, D-Weston, questioned whether the increases would hit many low-income retirees. Martin said some retirees could even be pushed into Medicaid, which would cost the state money.
"I want to know the impact and the type of person we would be affecting here,'' Rich said.
No more break for appointees?
Scott also supports requiring all types of employees to start paying the same premiums July 1. That change would eliminate a system in which lawmakers and appointees pay a maximum of $360 a year for family coverage and $100 for single coverage.
The idea is controversial in Tallahassee, at least in part, because many of the affected people lost civil-service protections under former Gov. Jeb Bush. They say they were promised low-cost --- or, at one time, no-cost --- insurance as part of a trade-off for losing job protections.
Ending the break, however, would save the state about $45 million. Haridopolos and Alexander have indicated support, even though it also would cost lawmakers more money.
"It's hard to be a leader if you're carving out a different situation for yourself,'' Alexander said.
--Capital Bureau Chief Jim Saunders can be reached at 850-228-0963 or by e-mail at jim.saunders@healthnewsflorida.org.