States Rein in Health Insurance Expenses

October 26, 2012

Financially strapped state and local governments are saving billions of dollars on health insurance by cutting back on free coverage for employees and raising worker contributions, says USA Today.

  • The advantage government sector employees have had in health benefits over private sector employees has declined from $1,523 in 2007 to $891 in 2012.
  • Similarly, the share of full-time government employees paying nothing for their coverage declined from 39 percent in 2007 to 30 percent in 2012.
  • Yet that number is still higher than the 17 percent of private sector workers that pay nothing for their coverage.
  • Moreover, paycheck withdrawals for health insurance are the same for public and private employees at about $425 a month for the family health coverage.

Government employees still benefit from more generous benefits such as lower copayments and deductibles and more choices.

The reductions in benefits for public sector employees stems from the efforts of Republican governors to reduce the costs of employee benefits. State officials have sparred with public employee unions in places like New Jersey, Ohio, Wisconsin and other states.

Public sector employees are taking the fight to courts and legislatures to protect their benefits. They argue that they have already made sacrifices such as taking wage freezes in order to protect health benefits.

Source: Dennis Cauchon, "States Rein in Health Insurance Expenses," USA Today, October 23, 2012.

 

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