February 25, 2020
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Paying Their Share

The real-world forces that require most private sector employees to pay for a portion of their health care insurance — if, indeed, they have such insurance through their employers — should apply to state workers as well. A bill that would require state employees to pay 5 percent, and then eventually 15 percent, of the insurance cost will be heard by the Legislature’s State and Local Government Committee on April 27. LD 417, sponsored by Rep. Windol Weaver, R-York, also would require legislators to contribute to the cost of their health insurance.

The reason to have state employees pay a portion of their health insurance premiums is not to punish them or to set an example, but rather to bring some fairness into the equation. Decades ago, when state workers and public school teachers were not paid well, benefits were generous to encourage employee longevity. But the cost of benefits such as health care has grown dramatically.

A comprehensive restructuring of the way health care is delivered in the United States is overdue, for many reasons. According to the National Coalition on Health Care, total spending on health care in the U.S. was $2.4 trillion in 2007, or $7,900 per person. That represents 17 percent of the gross domestic product. Spending is expected to grow over the next 10 years reaching $4.3 trillion in 2017, or 20 percent of GDP. Germany devotes 10.7 percent of its GDP to health care, Canada 9.7 percent and France 9.5 percent; each provides health care to all citizens.

Rep. Weaver argues that in tight economic times, moving state employee contributions closer to their private sector peers is responsible. He’s right. The portion of the premium borne by the employees under the proposal is relatively small. Insurance premiums often jump by at least 5 percent in some years, and that increase is picked up by the taxpayer. Under LD 417, in the third year after implementation, state employees with single coverage would contribute 15 percent of the cost of the premium; this is on par with what most private sector workers pay.

State workers using family plans already pay a portion of the cost of the premium.

“I might not win any popularity contests with the state employee unions, but I think it’s time for state workers to contribute toward insurance costs the same way private sector employees do,” Rep. Weaver said.

According to the state Office of Employee Health and Benefits, the measure would save the state $2.3 million in the first year, $4.7 million in the second year and $7 million in the third year. The Legislature’s Office of Fiscal and Program Review reports that the state paid $109.9 million in premiums this year to cover 13,340 state workers.

Many state employees have accepted concessions such as pay freezes to help balance the budget, and more are likely. Still, LD 417 is a reasonable response to the state’s revenue crunch and an equitable treatment of state employees.

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