Gov. Scott Walker said the state is looking into creating a self-insured health benefits plan for state employees to avoid taxes and fees levied through the Affordable Care Act.
Under a self-insured benefits program, an employer -- in this case, the state -- sets aside a pool of money that pays for insurance claims. Employers who self-insure take on all of the financial risk of insuring their workers but can save money by not paying premiums to private insurance. Under Wisconsin’s current managed-competition benefits program, insurance companies shoulder that risk.
Walker said self-insuring could save taxpayers added money with the roll out of the Affordable Care Act.
“The main reason we’re looking at it,” he said, “is because under the Affordable Care Act, there are taxes and fees associated with the plan as we currently have it. Some of those could be avoided if we had a single option and so there’s some savings potential there.”
In his budget, Walker ordered the state Department of Employee Trust Funds to study the pros and cons of a self-insured model. The governor said a consulting firm looked into the matter and had mixed reviews.
“An initial report that was done by a firm pointed out some of the savings out there, but it also warned about some potential risk, just in terms of the market impact it could have," he said.
That impact would come from the state cutting off more than 200,000 employees and family members from private insurance companies.
Walker said studying the idea of self-insuring state employees does not automatically mean it’ll happen and any changes would be more than a year out.