March 2, 2010

House unveils revenue package; Governor sort of backs you on health care costs - or maybe not.

  1. The House Monday unveiled a revenue package that does not include a general sales tax increase. The House Finance Committee holds a public hearing on that today. The governor said yesterday she supports the House revenue package but prefers the Senate budget. Stay tuned.
  2. The Clean Water Act of 2010 (SHB 3181) passed out of the House Finance Committee Monday.


You may hear rumors about what the governor said exactly in her Monday press conference when asked about the $200 million-plus deficit in your health plans that left unfilled will mean a tripling of your health costs.

Gov. Chris Gregoire appeared to make the case for why that would be devastating to state employees but that the solution is that you pay more for premiums.

The governor got the question as a followup from the National Public Radio reporter who had filed a story on the health care deficit issue that was broadcast Feb. 26.

That piece recapped what led to the crisis. Was it the Legislature’s diversion of $215 million in 2008 or is it medical inflation, or rather underfunding to cover medical inflation?

“Despite charging more for co-pays and deductibles, the cost to run the state plan continues to outpace projections,” the NPR piece said. “And that’s led to finger pointing. Greg Devereux heads the largest state employees union. He blames the Legislature for creating the cash crisis by dialing back the state’s contribution in 2008.

"Greg Devereux: ’There’s no question it was a cash grab. There was $215 million in reserves and they simply lowered the funding rate so that reserves would be eaten up in the next year, which it was.’”

The piece went on to say that Republicans faulted the governor for not forcing contract re-negotiations to make you pay more for premiums. And they fault her for not declaring a fiscal emergency to do that.

(Before we go on, remember, that basically happened last year when the governor and Legislature effectively declared a fiscal emergency, and the contracts were re-negotiated so that you sacrificed hundreds of millions of dollars in pay raises, jobs—and, yes, higher health costs.)

NPR quoted Sen. Joe Zarelli, the ranking Republican on the Senate Ways and Means Committee, as saying “having employees pay higher monthly premiums would actually be fairer to them.”
“I think there’s a way that better serves the employees too to raise up the employee contribution rate and reduce some of the other cost sharing costs,” Zarelli told NPR.

Responded Devereux on NPR: “Our members have taken so many hits over the years trading off wages for health care that they don’t want to trade health care again now.”

Now, what the governor said Monday.

“I need everybody to understand: You cannot unilaterally re-open a contract,” Gregoire said.

But… “So what I need from the Legislature is a path forward. And I am prepared to open up the issue of 88/12 (the current state/employee premium split). I am prepared to open up the issue of the benefits package. I am prepared to open up the issue of deductibles and co-pays. I’m prepared to do all of that and I’ve talked with all sides about that. I encouraged the unions to come in and talk to me before we got into the legislative session about it. Again, it takes two and they wouldn’t agree to do it.”

She was asked why she doesn’t declare a fiscal crisis and re-open the health care article in the contracts for a second time:

“I have a fiscal crisis if the Legislature does nothing. While we’re sitting in a legislative session, my take on it was, ‘How can I declare a fiscal crisis when there’s a solution?’ I provided a solution. For example in my budget. So if they choose not as so far the House has nothing in it whatsoever, that will create a crisis. The Senate version will probably create a crisis as well. Let me tell you what it means. What it means is the deductibles for state employees will be somewhere between $3,000 and $5,000. The co-pay at point of service will be dramatic. The results of which is state employees will have cards that say they have insurance and as a practical matter they (will) have none. They can never afford to go to the doctor for the most part. So that will create a crisis. And I brought two of the three largest unions into my office last week to tell them this.”

To set the record straight, the Federation not only knew the gravity of the problem, but the union and its members have been the ones who for some time have assertively put the issue in front of the governor and legislators. And the 88/12 split does not cause the problem, it’s not about how and when to re-open the contracts, it’s about that diversion of more than $200 million from your health fund in 2008. No one disputes the governor’s take on the tragedy facing state employees if nothing is done. The dispute is over the fair solution to head off that economic tragedy for state employees and their families.


STOP HEALTH CUTS! Call 1-800-562-6000. Tell legislators to fund state worker health care at a fiscally responsible level in the supplemental budget (SSB 6444/HB 2824). They will know what you mean. They want to triple your health care costs—that is unacceptable on top of the $1 billion you’ve already sacrificed and the average hike of $1,100 a year in health care costs imposed on you this past Jan. 1.


Call 1-800-562-6000. Tell your legislators:
  • STOP HEALTH CUTS! Tell legislators to fund state worker health care at a fiscally responsible level in the supplemental budget (SSB 6444/HB 2824).
  • CLOSE TAX LOOPHOLES! SUPPORT HB 3176 to close tax loopholes. It will recoup hundreds of millions of dollars in lost revenue.
  • OPPOSE FURLOUGHS! OPPOSE SSB 6503, the state employee furlough bill. Its unintended consequences will cost more, not less. It’s in the budget bills, but has not been voted on by the House.
  • PASS INTERPRETERS’ COLLECTIVE BARGAINING BILL, E2SSB 6726. Give state Medicaid interpreters a voice on economics and workplace issues and a seat at the table on a reform-oriented work group. It needs to pass out of the House.

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