Traverse City Record-Eagle

Archive: Saturday

August 28, 2009

Dillon provides details on health plan

LANSING (AP) -- A 13-member board appointed mostly by the governor would play a key role in developing a statewide health care coverage plan for public employees under a proposal pitched by the top Democrat in the Michigan Legislature.

House Speaker Andy Dillon released a draft version Friday of part of the measure, which could be formally introduced and assigned to a special legislative committee as early as next week.

Dillon says up to $900 million a year could be saved with the system to consolidate thousands of public employee health care plans scattered across the state into one big plan at the state level.

Having an estimated 400,000 workers and retirees in a single coverage pool could save money through increased buying power and administrative efficiencies, he said. But public workers might also see higher premiums and out-of-pocket costs or reduced benefits as part of the savings to taxpayers.

Public employee health care costs an estimated $4.5 billion to $5 billion a year at state and local levels combined. Officials are searching for ways to contain those costs, which is why Dillon's plan has generated interest among school and government administrators since he outlined the idea last month.

Unions for public employees are against the idea, saying it would undercut their contract bargaining rights. Some unions also have argued that Michigan should wait to see what transpires with health care reform at the national level before tackling such a broad proposal.

Friday's bills are the first of several related to Dillon's plan expected to be introduced in the next few weeks.

"The devil is in the details and we'll be going through those details carefully to find out what the Speaker has in mind for the health coverage of half a million Michigan workers and their families," said Doug Pratt, a spokesman for the Michigan Education Association, the state's largest teachers union.

Michigan's Office of State Employer, which now bargains on health plans for state employees, would have a major role in the statewide plan. The office could make recommendations for coverage plans to the 13-member board after negotiating different benefits options and costs for the program with insurance carriers.

Public employers with contracts extending beyond Jan. 1, 2010 could be exempted from the statewide plan until their current contracts expire. Public employers could opt out of the plan if they prove they can provide comparable benefits at a lower cost.

Assessments on participating employers and retirement systems would pay for the administration of the program.

Dillon appears open to changes, calling his proposal a "draft" that the special House committee can craft into a final plan. Under the initial draft, benefits could be benchmarked against those offered by public employers in other states. Benchmarking benefits against those offered by private employers does not appear to be specified in the initial proposal, but it also wouldn't be ruled out.

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