Walker: Wisconsin should avoid 10% hike on state worker insurance

MADISON - Gov. Scott Walker’s administration warned Friday that rejecting his insurance overhaul for state employees could lead to a 10% increase in workers’ premiums.

In calculations released Friday, administration officials said they might have to make the double-digit increase to state worker coverage if the state doesn’t switch to a self-insurance model for its employees. Under that approach, the state would set aside money to pay health care costs for its employees rather than its current practice of paying insurance premiums to health maintenance organizations, or HMOs.

Walker officials originally said the self-insurance approach would save $60 million in state tax dollars over the next two years. On Friday, they pointed to an additional $21 million that self-insurance would save the state. 

On top of that, the state might also have to pay $22 million in federal taxes if Congress does not repeal the federal Affordable Care Act, also known as Obamcare. The lost saving and added costs would add up to a $103 million hit for state taxpayers.

Republican lawmakers, however, have repeatedly said that they’re unwilling to move to self-insurance, questioning whether it would disrupt the state’s insurance market and fail to deliver long-term savings.