State Employees Likely to Face Benefit Reductions
Even union officials have begun acknowledging this critical pathway. Nothing is likely to change before next July, when new collective bargaining agreements are in place, but discussions are getting under way.
Diane Lovell, who sits on the Public Employees’ Benefit Board which is charged with designing the health benefits, intends to broker the discussion when her union, the American Federation of Federal, State, County and Municipal Employees (AFSME), holds its leadership conference in October.
“I intend to do a background piece so people understand the different models we’re looking at such as the value-based approach that the Health Care Leadership Task Force advanced,” said Lovell, council representative for the 5,000 AFSME employees in Oregon. “I want to be really clear; there won’t be any decisions made. It’ll be more of an educational session.”
When PEBB meets again, on Sept. 21, board members are expected to take a serious look at ways to reduce costs over the next two years.
Given the state’s revenue forecast, the pressure is likely to become more intense, Joan Kapowich, PEBB’s administrator, told the board.
“I’d much rather work on a series of options even though many of them may not be desired options,” said Fariborz Pakseresht, deputy director of the Oregon Youth Authority, who’s a board member. “At least we need to do some work rather than be forced to come up with something that’s less than desirable.”
Recently Kapowich sent a survey, asking board members to rate various scenarios such as offering a health savings account, a high-deductible health and incorporating value-based benefits with lower co-payments for preventive services.
Other options include providing financial incentives for members to move to Providence Choice, which has a closed panel of providers, or requiring employees to pay a share of their premium based on their salary.
“We’re going to take the temperature of the board,” said Lovell. “It’s important for us to reach consensus on the principles that will guide our decisions, and continue with our discussion.”
Despite the current fiscal crisis, the unions are extremely unlikely to consider reducing health benefits this year. “I don’t believe they’d be willing to break the agreement,” Lovell added. “To date when that question has been posed to the leadership, the answer has been no.”
There could be a small glimmer of hope. Barney Speight, director of healthcare purchasing for the Oregon Health Authority, suggested that management employees might be willing to pick up a greater share of their healthcare costs.
“I want to make it clear,” he told his peers on Aug. 17. “I don’t think there’s a legal prohibition from the governor directing us to develop a benefit design or premium share for management. There may have to be an interim contingency budget given the fact there’s the collective bargaining agreements. Management folks may be treated differently.”
Of the state’s 52,631 employees, fewer than 10 percent – 5,001 – represent management. In total, the state covers health benefits for 127,733 (including dependents), of which only 13,473 include management and their dependents.
PEBB’s expenditures are expected to reach $668.2 million this calendar year, not including the 1 percent provider tax, and $765.4 million in 2011; that figure does include the provider tax.
Currently PEBB has $142.3 million in its reserve account. At year’s end, when a reserve fund established by Standard Insurance rolls into its coffers, that number will reach $176.9 million.
To Learn More
To take a look at the survey PEBB members are considering, click here.
For related PEBB coverage click here.
Printer-friendly version
Comments
We need to finally face the facts: our discoordinated and expensive financing of health insurance will fail. With PPACA or without it. All other wealthy nations have adopted health care financing systems that have 3 principles. First they have one system for everybody. Second, they do not allow profits on the sale of insurance for the comprehensive set of necessary health services. Third they include all their citizens. Everybody is in and nobody is out. Until we adopt a system that is financed in this manner we will fail to deliver affordable health care coverage to all.
Awww.... so sad to think that their benefits may be brought a tiny step closer to those of us in the real world. I always hear the comment that public employees chose to be so for the benefits, yet interestingly, their pay seems to be pretty much on par with the private sector. And lucky them - thanks to unions they can keep their jobs even when they aren't good at them, even bumping more qualified folks out of jobs in tough times just because they have been there longer. Well guess what - I went to work for a company who completely eliminated our pensions and will likely not offer any retiree medical coverage by the time I am that age, unlike public employees who retire with pensions that are greater than their salaries and full benefits. I'm trying really hard to feel sorry for them but it's not happening.
I work for the state and my salary is no where near where it would be if I was in the private sector. Many state employees choose to take lower salaries for the health care benefits.
One prudent compromise would be for the state to continue to pay health insurance premiums for their employees, but require the employees to pay the premiums for their dependants, or at least some agreed upon percentage of the premium.
I wonder if the PEBB board is aware that Providence Choice (or any flavor of Providence, for that matter) and its closed panel of providers will mean that coordinated care between medical and mental health providers will be made nearly impossible? In fact Providence does not even have a panel of mental health providers; that has been outsourced to United Behavioral Health (dba PacifiCare), an organization that has been repeatedly (and successfully) sued for refusing to reimburse valid claims, manipulating UCR (usual and customary rates) to shortchange members and providers alike, etc (see http://en.wikipedia.org/wiki/UnitedHealth_Group#Legal_issues).
PEBB members with Providence insurance will in most cases not be able to have coordinated care for mental health conditions such a depression, autism, eating disorders, etc., with medical complications because the provider panels are completely different. Your psychiatrist may be contracted with Providence but not with PacifiCare, or vice versa. This almost certainly means PEBB members will receive a lower standard care (lack of coordination between providers, insurance issues that affect access to treatment and so on) than is available to Regence Oregon or ODS members. Both of these plans have in-house mental health departments and a single provider panel. I find it ironic that an organization seeking a "value based approach" has selected a plan that is specifically designed to prevent the type of coordination that has been proven to reduce long-term costs and increase favorable treatment outcomes. And all to save what is by all accounts a paltry sum of money ($2m, versus their old contract with Regence).
Post new comment