A proposal to add a low-cost, high-deductible plan to the state’s menu of medical insurance options was left out of the budget that Gov. Jerry Brown signed on Wednesday, although it could resurface later.
“Staff advise that those provisions weren’t included in the final agreement” that Brown struck with the Legislature, Department of Finance spokesman H.D. Palmer said in an email.
The governor wanted lawmakers to require that CalPERS, which negotiates and administers medical coverage for state employees and retirees, add at least one health plan to the state’s menu that would give subscribers lower monthly premiums paired with a tax-advantaged health-savings account. Since the state pays a percentage of premiums, a high-deductible pay would save money for the state and, by extension, taxpayers.
But high-deductible plans exchange those lower premiums for higher co-pays for visits to doctors and significantly larger deductibles for treatments, hospitalization and drugs. Employees bear those higher out-of-pocket costs.
Never miss a local story.
Unions blasted Brown’s proposal, while some state experts questioned whether such a plan – common in the private sector – would save money. And the lowest-premium insurance that CalPERS offers is also its least popular, raising the possibility that state employees would stick with their high-premium plans even if offered a high-deductible alternative.
Although the proposal wasn’t in the budget, Brown could still resurrect it. The governor has said he wants to negotiate lower-tier benefits with labor unions, and he’s in talks with four group right now. If any reach agreement for a cheaper plan before lawmakers adjourn in September, a bill could be rushed through for Brown’s signature.
And with three more state budgets to craft before he is termed out, the governor could float the idea again in subsequent proposals.