Most state employees could pay twice as much toward their health care premiums and it would still be half the national average
Scott Walker on Tuesday, February 1st, 2011 in the State of the State speech
Wisconsin Gov. Scott Walker says state employees could pay twice as much for health care premiums and still be paying half the national average
Gov. Scott Walker left no doubt in his first "state of the state" address that he wants benefits concessions from state employees.
Walker said state employees need to share the pain felt by private-sector workers so the state can balance its budget without tax increases. In making his case, he tossed out some stark statistics on pensions and health care coverage:
"Most state workers only pay about 6 percent of their premium costs for their health care plan," Walker told lawmakers. "Asking public employees to make...a premium payment of 12 percent, which is about half of the national average, would save the state more than $30 million over three months."
He added: "Most workers outside of government would love a deal like that – particularly if it means saving jobs."
We set out to test the governor’s claim.
Walker press secretary Cullen Werwie pointed to a Kaiser Family Foundation study that employees nationally -- public and private -- pay an average of 29 percent of the cost of the premiums. The Milwaukee Journal Sentinel reported those findings on Sept. 12, 2010.
Werwie also provided state documents showing the premium contribution by union and non-union state workers, as well as the total premium cost to the state. He said they show that most state employees pay between 4 percent and 6 percent.
Let’s dig into both sides of the equation.
First, is Walker correct that "most" state employees pay only about 6 percent?
Unionized state workers in the most common insurance tier pay $78 a month on family premiums that cost the state between $1,500 and $1,800, state figures show. That’s in the 4 percent to 5 percent range by our calculation. Non-union state workers pay a bit more -- $89 a month in most cases. That works out to a 5 percent to 6 percent share.
So Walker’s number looks good.
And so does the "most state employees" claim: More than 98 percent of state employees fall into those categories, according to figures from the state’s Department of Employee Trust Funds.
There is a higher-premium plan in which some state employees pay about 15 percent of the cost, or $412 a month. But it is used by just a tiny fraction of state government workers.
Just to cap this off, we asked the state to calculate the employee share across all plans, both single and family coverage, for all employees. They came up with 5.6 percent.
Now the national side.
First, a bit of background. The national cost trend is clear. Since 2000, average premiums for family coverage have increased 114 percent, the Kaiser study found.
Several other studies back up Walker’s claim on the national numbers regarding public and private employees.
The U.S. Bureau of Labor Statistics 2010 health care benefits survey put the employee share at 32 percent for family coverage. It’s 21 percent for single coverage.
Of course, there is a range, but that’s the collective national figure for civilian workers, public and private. Union workers paid much less than non-represented workers.
Now let’s tease out just government workers, to see how Wisconsin compares there.
The Kaiser study -- the one relied on by Walker for his overall comparison -- put the employee share paid by state and local government workers nationwide at 25 percent for family coverage.
Finally, a study by The Segal Co., a private benefits firm, that looked just at state government workers showed a majority paying between 20 percent and 60 percent of their premium costs for family coverage.
If Wisconsin workers are paying around 6 percent, that puts them in the bottom fifth nationally among state employees, Segal’s data shows. A very small number pay zero toward their premium.
There’s a clear trend toward asking state employees to pay more, the Segal study said. Still, private-sector workers are being asked to share even more, said J. Richard Johnson, Segal’s public sector health practice leader.
Experts warn against drawing comparisons without looking at employees’ total package of wages and benefits -- and what they may have given up to get them. (We examined another aspect of that in an earlier item on public vs. private sector pay.)
So in this item we’re not trying to determine where Wisconsin workers stand in the big picture.
But we can come to a firm conclusion on the state employee health premiums, here and nationally.
The governor relies on a statistic that mixes public and private workers, but in this case that’s not a problem: Walker’s point is that state workers need to be more in line with their private counterparts. Walker’s numbers for state workers and the national context are right on target. And his math holds up even when the comparison is narrowed to just public employees.
We rate his statement True.
Published: Tuesday, February 8th, 2011 at 9:00 a.m.
Interviews with Cullen Werwie, press secretary to Gov. Scott Walker, Feb. 2 and 3, 2011
E-mail interview with Stacy Van Alstyne, public relations director, The International Foundation of Employee Benefit Plans, Feb. 3, 2011
Interview with Gary Claxton, director of the Health Care Marketplace
Project at the Henry J. Kaiser Family Foundation, Feb. 3, 2011
Interview with J. Richard Johnson, The Segal Co., Feb. 3, 2011
Interview with Carla Vigue, spokeswoman, Wisconsin Department of Administration, Feb. 3, 2011
Kaiser Family Foundation, Employer Health Benefits 2010 Annual Survey
The Segal Co., 2010 Study of State Employee Health Benefits, Winter 2011
U.S. Bureau of Labor Statistics, National Compensation Survey, March 2010
Office of State Employment Relations, State of Wisconsin health insurance premium contributions, 2010-’11
JSOnline.com, Public workers' generous benefits come at a price, Sept. 12, 2010
JSOnline.com, Area health benefits costs soar, Sept. 14, 2010
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