Finance committee rejects self-insurance

New plan could hike employee costs by 10 percent

The state's budget writing committee has unanimously rejected contracts championed by Gov. Scott Walker that would have approved a major move in insurance for state employees.

A plan proposed by republicans instead, according to the co-chairs of the committee, will find more than $60 million in savings in the Department of Employee Trust Funds, including up to 10 percent cost increases for state employees.

Rep. John Nygren, R-Marinette, and Sen. Alberta Darling, R-River Hills, told reporters Thursday afternoon that the committee intended to reject a move to self-insurance, saying the plan was too risky for state finances.  Self-insurance has the state assume the risk rather than purchase insurance through an HMO.

Gov. Scott Walker had heavily pushed the idea, and the Group Insurance Board had approved contracts with seven companies to administer self-insurance.  The administration had assumed $60 million in savings, of which committee members had been skeptical.

Democrats had also panned the move, saying it could disrupt insurance markets across the state.


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