Here & Now

Darling Talks Self-Insurance For State Employees

Frederica Freyberg:

A First Look tonight at the unfolding work of the legislature’s Joint Finance Committee as it fashions a state budget even in the midst of disagreement with the governor over key aspects of it. This week budget committee co-chairs said they will reject Scott Walker’s plan to go to self-insurance for state employees. But then they’re left with making up the $60 million the governor says doing so would save and that his budget puts toward K-12 education. We’re joined now by Republican Senator and Joint Finance Co-Chair Alberta Darling. Before we go to the senator we should mention that employees at Wisconsin Public Television are covered under state insurance plans. Senator, thank you very much for being here.

Alberta Darling:

Thank you for having me.

Frederica Freyberg:

Describe why you don’t want to switch to state self-insurance.

Alberta Darling:

Well, in order to switch you have to say are we going to get something that's better? That’s the key question. Less expensive and good quality. We can’t assure ourselves that that’s true. If you look at the premiums they’re projected our premiums are going to be 1.6%. And the self-insurance plan is supposed to save us 2%. So we’re already saving money in the current plan and our plan is very robust. It can be improved to have more incentives and disincentives for better choices so we’re healthier because that’s an issue in Wisconsin. We could be a healthier population. But in general, we’d be throwing out a plan that’s very robust and it really affects the free marketplace. That’s one of my biggest concerns that if we shift thousands of public employees to a self-insurance plan that we’re not even sure about, we’re going to really create a change in our free market system of healthcare. And if you talk to people nationwide, they say Wisconsin has one of the best healthcare delivery systems in the country. So we have a lot to lose, a lot to gain perhaps in the end, but right now we’re not sure there’s enough to gain to offset what we could lose. And you know what? What we could do is work within the system to save the money by having evidence-based approaches, by having more emphasis on wellness and more incentives for our employees to make better choices.

Frederica Freyberg:

So you feel as though with those kinds of changes around wellness, incentives, disincentives that you could save the $60 million that the governor says going to self-insurance would bring?

Alberta Darling:

We think we can. And our providers have said in support of our not shifting that they can provide those changes and we can have the savings. Now, I think with the federal government in disarray right now over Obamacare and many insurance companies are leaving states. In fact, Iowa is going to have maybe one insurance company left at that. And we have a robust healthcare system with insurers being very competitive and having very good packages, albeit too expensive but again we’re projecting a 1.7% increase. If you compare us over the past 10 years, we were at about 3% increase versus the 7% to 12% net nationwide. I think we have a very good product and we’re not convinced we can get a better one with self-insurance especially at this time of our history.

Frederica Freyberg:

Representative Nygren talked about how ETF had about $60 million to $80 million in reserves. Can you use that and where did it come from? Have you determined that?

Alberta Darling:

We’re going to have a meeting with Secretary Neitzel and find out where that came from with ETF. Obviously they’ve been saving money in preparation of this shift and if they can save money in this environment we can continue to save money with the evidence-based wellness incentives and disincentives approach that I mentioned earlier. But we could do it. We have a very dynamic healthcare system and our providers have said they could do even better.

Frederica Freyberg:

I want to jump to transportation. Where do you and other Republicans in the Senate stand on the Republican Assembly transportation plan rolls a flat tax in addition to a sales tax on gas among other changes?

Alberta Darling:

Well I give Dale Kooyenga a lot of credit for putting an alternative on the table. But I think in the Senate there’s not a lot of support for it because they feel there are too many increases on fees and taxes albeit he’s shifting to a possible flat tax for income tax, which would be highly desirable. But people are feeling there are too many increases in fees and it’s not worth the effort to do that. And I think that what we have to do is say look, let’s work together. Let’s work with the governor. Let’s work with the Assembly and come up with a short-term and long-term solution. We can’t keep kicking the can down the road. And my concern is the southeast has many projects that have been started. We’ve invested millions of dollars in these projects and let’s finish them. In fact, the federal government has said finish your projects. And if we don’t — if we stick with the current budget, the north leg of the zoo will not be completed until maybe four years down the road if that. And that will be a disaster for all we’ve gone through. And we won’t have access to an on and off ramp to the Medical Regional Center which is a huge attraction, a huge workforce for us. We cannot leave those people hanging out there. I think it’s not just for southeast Wisconsin. It’s for the whole economy of our state that we finish the mega projects in the southeastern Wisconsin. I talked to Frank Busalacchi about how did you do the Marquette on time and under budget? He said they made a lot of changes to the design and they made some cuts but the project went really well and it is serving our region very well. We can make better decisions and we need to do that. We can’t just delay everything. It’s going to get more expensive and our economy will be affected.

Frederica Freyberg:

We need to leave it there. Senator Alberta Darling. Thank you very much for joining us.

Alberta Darling:

Thank you for having me. I really appreciate it.