The State Worker

Unions, retirees blast Jerry Brown’s state worker medical plan

Daniel Heidelburg, 51, a retired Para Transit driver from Oak Park, is examined by UC Davis Doctor George Gallardo.
Daniel Heidelburg, 51, a retired Para Transit driver from Oak Park, is examined by UC Davis Doctor George Gallardo. rbyer@sacbee.com

Unions lined up Wednesday to oppose Gov. Jerry Brown’s proposal to offer high-deductible medical coverage to state employees, suggesting it could hurt workers’ health instead of improving it.

“We think that high-deductible plans are a very bad thing,” SEIU Local 1000 President Yvonne Walker said during a Senate subcommittee hearing into Brown’s plan.

Meanwhile, state experts said it’s not clear whether a plan with high-monthly premiums and a tax-advantaged health savings account would save money in the long run. The most comprehensive studies take in only three years, not nearly long enough to establish a reliable trend.

Brown wants to add at least one health plan to the state’s menu that would give subscribers lower monthly premiums and a tax-advantaged health-savings account in exchange for higher co-pays for visits to doctor significantly larger deductibles for treatments, hospitalization and drugs.

High-deductible plans and health-savings accounts have become common in the private sector as a way for employers to shift more health care cost to their employees. This year the state will pay about $3 billion for employee medical benefits.

Brown has said he intends to bargain the new tier of health insurance coverage with unions when their contracts expire, but Wednesday’s hearing served notice that labor organizations won’t meekly go along.

“Everywhere we see these high-deductible health plans we try to bargain them away,” said Dolores Duran-Flores, a lobbyist for the California School Employees Association, “because they’re bad, bad, bad for my members. They hate them.”

CalPERS, which is dominated by union members and politicians with labor ties, has stayed away from offering the kind of low-premium high-deductible health plan Brown has proposed, said Ann Boynton, who is responsible for the fund’s health plan contracting.

For reference, she noted that the lowest-premium plan CalPERS offers members now, PERS Select, has just 17,000 subscribers, fewest of any of its preferred-provider organization plans.

Member surveys show those subscribers are the most dissatisfied with their coverage, Boynton said, due to the steep co-pays and how hospitals in the preferred networks price services.

Brown and other proponents of high-deductible plans say they encourage subscribers to think twice before going to the doctor, thereby cutting costs. But CalPERS is worried that high-deductible plan subscribers will put off important visits to the doctor to avoid big co-pays. That could lead to more serious illnesses that would require more expensive care later on.

“Unlike how some employers think about things, we have our members until they die,” Boynton said, “so the long-term is incredibly important to us.”

Premiums for other CalPERS plans would likely increase because they would no longer include the youngest, healthiest employees who now pay in but receive few benefits. The new plan’s premiums would likely jump, too, Boynton said, because the pool of employees covered would be so small. The cost of treating a car-accident victim or providing neo-natal intensive care, for example, would have to be spread to others in the pool via higher monthly premiums.

Nick Schroeder, a state-employee compensation expert with the Legislative Analyst’s Office, said that without more specifics it is impossible to predict what impact a high-deductible plan would have.

Any savings or added costs will “really depend on the structure of the program,” Schroeder said. “In general we think if the goal is to achieve savings, that might not occur.”

Call Jon Ortiz, Bee Capitol Bureau, (916) 321-1043.

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