NEWS

Branstad's health coverage plans worry Iowa's public employees

William Petroski
bpetrosk@dmreg.com

Gov. Terry Branstad's plan to curb costs for public employees' health insurance worries union leaders, even as new studies confirm those costs are skyrocketing and many state employees pay far less for premiums than workers elsewhere.

Branstad, in his Condition of the State address, proposed legislation that would remove health insurance as a subject of collective bargaining for unions representing state, city, county and school district employees.

Iowa has more than 500 health care plans for public employees, and many plans are inefficient and "way too costly" for public employees and Iowa taxpayers, he said.

The governor wants to establish a single, comprehensive statewide health care contract for thousands of public employees to spread the financial risk and control costs.

"Under our present system, a few adverse health outcomes will destroy the budget of a city, county or school district," he said.

A new analysis by the nonpartisan Iowa Legislative Services Agency examined health insurance costs for certain executive branch agencies, judicial branch offices and legislative branch offices between 2005 and 2015. It found that health insurance costs for those employees soared from $143.2 million to $235.7 million, an increase of $92.5 million, or 64.6 percent.

Over that 11-year period, health insurance rose from 11.7 percent of total pay and benefits in 2005 to 15.1 percent in 2015.

Nationally, federal Bureau of Labor Statistics show that in 2015, all government and private-sector employers contributed on average 80 percent of the cost of health care premiums for single coverage and 69 percent towards family coverage.

But in Iowa, state government's contribution in 2015 for state employees was estimated at 99.4 percent for single coverage and 97.6 percent for family coverage.

Michael Bousselot, Branstad's chief of staff, told reporters at a budget briefing the governor is convinced it's time to change health care coverage for Iowa's public employees.

"The vast majority of state employees pay $20 a month for their health care and not much more," Bousselot said.

Unions representing public employees at all levels of Iowa government are concerned about Branstad's plans. Some are rejecting the proposal outright.

Danny Homan, president of Council 61 of the American Federation of State, County and Municipal Employees, said Branstad is making an "apples to oranges" argument by claiming that state workers aren't contributing enough money for health insurance.

Homan said labor arbitrators have sided with his union on the issue in past contracts with state officials. AFSCME represents about 40,000 Iowa workers.

."We believe that public employees on the whole, if you are going to compare education, experience and the jobs that they do, are underpaid in this state," Homan said. "We have chosen to give up pay to keep our benefits. We have done that time and time and time again, and yet we are attacked time and time and time again because they believe our benefits are too high."

A separate issue review released Jan. 6 by the Iowa Legislative Services Agency analyzed the costs for wages and benefits for employees of some state offices and found that overall, government workers elsewhere receive higher total compensation on average.

The agency analysis said Iowa's state employees studied were paid an average of $30.19 an hour for wages and benefits in 2005, which rose to $42.38 in 2015, a 40 percent increase.

Nationally, the Bureau of Labor Statistics showed that for all state and local government workers, the average costs of wages and benefits rose from $35.50 an hour in 2005 to $44.22 in 2015.

Tammy Wawro, president of the Iowa State Education Association, said her organization's 34,000 school employees shouldn't be compared with state workers represented by AFSCME.

The health insurance plans offered in schools can vary widely, and some rural school districts offer better health insurance as a recruiting tool, she said. She also noted that some school districts already participate in insurance pools, and some are self-funded.

Wawro said Republicans criticize Obamacare as a one-size-fits-all government program, but she believes Branstad's solution appears to be similar. She also questions whether taxpayers should be telling school employees what type of health insurance they should purchase.

“Does the taxpayer tell me what to buy at the grocery store as well?" Wawro asked.

Jason Bardsley, a state trooper who is president of the State Police Officers Council, which represents about 600 sworn officers, said his union already has a cost-efficient health insurance plan, and there are concerns officers' costs could rise under Branstad's proposal.

These officers currently pay 20 percent of their health insurance premiums, although the expense is reduced to 15 percent by participation in a wellness program.

But Branstad generally is getting a sympathetic ear from Republican legislative leaders, whose caucus members said they heard a chorus of frustration from Iowa taxpayers as theyswept to victory in November's elections. Republicans control the Iowa House and Senate and the governor's office for first time since the 1998 legislative session.

"I believe that voters gave us a mandate to do business differently," said Senate Majority Leader Bill Dix, R-Shell Rock.

He and House Speaker Linda Upmeyer, R-Clear Lake, both promise that Branstad's proposals to revise collective bargaining will be seriously considered.

However, House Majority Leader Chris Hagenow, R-Windsor Heights, said lawmakers are aware that not every school district and county is identical.

"We’ve got to take a look at all that and how that would work," he said.

Democratic legislators, whose ranks include union members, see little merit in the Republican governor's efforts to remove public employee health insurance from collective bargaining.

Senate Minority Leader Robert Hogg, D-Cedar Rapids, contends Branstad has invented a "fake problem" by blaming public employees for soaring health insurance costs.

"Collective bargaining is working well in Iowa, and has since it was adopted by a Republican Legislature and a Republican governor in the early 1970s," Hogg said. "Health benefits for city sanitation workers and firefighters and police officers and DHS social workers and our correctional officers are not a problem — we need more health security for everyone."

The Iowa Association of School Boards wants to see more details before reaching any conclusions on Branstad's proposal, said LIsa Bartusek, the organization's executive director.

“Will this really save money, and for whom?" Bartusek asked. "We would not turn down an opportunity to save taxpayer dollars, but we have big questions about how this would work.”

Denise Hill, director of the health care law program at Drake University, said Branstad's proposal is complicated by the fact that Congress is planning to repeal the Affordable Care Act, which could have implications on health insurance for Iowa’s public employees.

She believes Branstad’s proposal could potentially save taxpayers money, but she suggests the Legislature should establish a task force to study how the plan could be implemented. This process would include bringing in in experts on health insurance, including officials from Wellmark Blue Cross Blue Shield, the dominant health insurance business in Iowa.

"I think if they took time to craft something thoughtful, we could come up with a plan to benefit both" public employees and Iowa taxpayers, Hill said.

Hill also said there would likely be less resistance to changes in health insurance for public employees if the state engaged in a data-driven decision-making process that could demonstrate good health insurance coverage could still be provided, albeit at a lower cost to state and local governments and school districts.

Chief Political Reporter Jason Noble contributed to this story.