 Nevertheless, the letter says, the state is doing what it can to hold down cost
and minimize the impact on its workers.
The state’s biggest public-sector employee union argues the administration of
Gov. Bruce Rauner, while purporting to correct “misinformation” in the memo to
employees, is playing some games of its own.
Because some of the state employee healthcare plans are considered “Platinum
Plus” or “Cadillac” plans under the Patient Protection and Affordable Care Act,
they likely will be subject to federal penalties in future years, Pam Kogler,
deputy director of benefits for the state’s Department of Central management
services, wrote to state employees.
“Premiums for these expensive Platinum Plus, Cadillac plans are likely to double
after July 1, 2016,” Kogler wrote in her letter of Dec. 11.
But, contrary to some information employees might have received, the state is
trying to hold the cost for employees down, she said.
“Starting July 1, 2016, under the completed contracts and in our current
proposals, we will offer less expensive plans with the same carriers and the
same services for substantially the same premium costs that we offer today.”
Further, Koger said the state has proposed a cap on any increases to employee
premiums for 2018 and 2019. She said the state would cap increases to employee
premiums at 10 percent even if the state’s actual costs increase by more than
that.
Koger said Illinois — faced with sharply rising health spending — is
“implementing several cost-savings measures, including identifying and removing
those individuals who are defrauding the system, that will allow us to contain
costs going forward.”
And, she wrote, “Overall, we’re shifting towards a consumer-focused model and
away from a ‘one-size-fits-all’ approach, a strategy that mirrors what is
happening in other states and is long overdue here in Illinois.”
The American Federation of State, County and Municipal Employees Council says
the Rauner administration is playing word games in an attempt to downplay the
potential cost increases that workers face.
AFSCME spokesman Anders Lindall on Monday pointed to recent comments by Mike
Newman, AFSCME’s deputy director, who told the (Springfield) State
Journal-Register the administration’s letter was “extremely misleading and
disingenuous.”
According to Newman:
The state had no choice but to leave the existing plans in place for the current
fiscal year, 2016, because so much of that fiscal year has gone by it is too
late to implement changes.
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 The administration is still demanding a plan that would double
employee health costs in fiscal year 2017, and he says the
additional cost that would come by way of premiums, copays and other
out-of-pocket expenses that would average an additional $3,100 per
employee.
The new plans the administration refers to are not less-expensive
plans but instead an offer to pay the same premiums but see
increased costs by way of higher copays, deductibles and
out-of-pocket maximums.
Regarding costs for fiscal years 2018 and 2019, Newman told the
Journal-Register, “They’re talking about capping them at 10 percent
after they’ve already doubled.”
The Republican governor’s administration, AFSCME and and several
other large unions remain in negotiations more than five months
after expiration of the most-recent contract.
Analyst Naomi Lopez Bauman said it’s no surprise Illinois is facing
challenges under the penalty provisions Affordable Care Act.
“Since not one penny of this ‘Cadillac’ tax actually goes to provide
any health care for the employee, it really is good to get out of
it,” said Bauman, health care policy director for the Goldwater
Institute, a conservative and libertarian think tank.
“The bottom line for employees is that Illinois does offer some of
the most lavish health benefits in the country and if they’re not
triggered immediately (under ACA), they will be eventually because
of the way that the tax is pegged to inflation and not to medical
inflation,” Bauman said.
“Right now is the time … for the state to craft new health plan
options, ones that will put the employees in charge of their
first-dollar coverage and can actually provide more access and
affordability without paying this tax that’s not going to benefit
them.”
The efficacy of the excise tax on high-cost plans, or so-called
Cadillac plans, is heavily debated.
“Proponents of the new excise tax argue that these benefit-rich
plans insulate workers from the high cost of care and encourage the
overuse of care — such as unnecessary tests
and hospital visits—that raise U.S. health costs overall,” notes the
Robert Wood Johnson Foundation in its Health Affairs publication.
At the same time, the foundation notes, the plans may be more costly
for reasons other than their generous benefits, including plan
participants’ health status or advanced age, and critics say the tax
unfairly “hollows out” benefits, according to Health Affairs.
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