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JFC rejects self-insurance contracts, expects to find $63.9 million in savings

JFC rejects self-insurance contracts, expects to find $63.9 million in savings

Credit: JFC Co-Chairs Rep. John Nygren, R-Marinette, and Sen. Alberta Darling, R-River Hills, speak to reporters. 

The Joint Finance Committee unanimously rejected contracts to self-insure the health plan for state and some local employees Thursday.

The committee also unanimously approved a motion requiring the Group Insurance Board to attempt to ensure $63.9 million in general purpose revenue savings over the next two fiscal years.

That’s more than the $60 million Gov. Scott Walker estimated self-insurance would save the state in his 2017-19 budget. The increase is in part because of a miscalculation involving Affordable Care Act taxes, JFC Co-Chair Rep. John Nygren, R-Marinette, told reporters before the vote.

Those savings would come through drawing down reserves at the Department of Employee Trust Funds by about $25.8 million. Lawmakers also expect to find $22.7 million in “negotiation savings” with health plans.

The remaining $15.4 million would come from other changes, including through plan design changes and increasing the usage of health plan tiers authorized in state law. Lawmakers also approved establishing five health plan tiers in state law rather than three.

The motion from JFC leaders requires that total employee costs wouldn’t increase by more than 10 percent in calendar years 2017 and 2018.

Lawmakers also voted to add four members to the Group Insurance Board that are appointed by leadership of each party in both legislative chambers.

They also voted to require that the GIB submit proposed changes to the health plan to JFC annually for approval. And they requested that the Joint Legislative Audit Committee direct the Legislative Audit Bureau to conduct an audit of the health plan.

“We think this is a good decision for the people of Wisconsin,” JFC Co-Chair Sen. Alberta Darling, R-River Hills, told reporters before the vote.

Provisions of the 2017-19 budget are still subject to approval by the rest of the Legislature as well as Gov. Scott Walker’s veto pen.

Read the motion.

This story will be updated for tomorrow’s edition of Wisconsin Health News.



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