Wisconsin’s State Retiree Health Insurance costs jumped $142 million

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The cost for insurance for former state of Wisconsin workers jumped by almost $143 million in the past year, and now costs more than $680 million annually.

A new audit from the Legislature Audit Bureau looked at Wisconsin’s State Retiree Health Insurance program.

“Based on [the] valuation and the adjustments, the total liability for the program was $682.5 million as of June 30, 2019, an increase of $142.8 million from June 30, 2018,” the audit states.

Brett Healy with the MacIver Institute says the increased price tag should be shocking.

“This is another example of just how good state government employees have it in Wisconsin and how generous Wisconsin taxpayers are paying for their platinum health care, their handsome pensions and the extras they receive in retirement,” Healy said. “Taxpayers could save almost $700 million a year if we did away with this unnecessary benefit.”

While taxpayers don’t directly pay the premiums for retirees, the audit states taxpayers do subsidize them.

“The state does pay higher premiums for its active employees than it otherwise would if retirees were excluded. Therefore, the state implicitly subsidizes the premiums paid by participating retirees by offering these individuals access to health insurance coverage at a lower rate than they might otherwise pay based upon their age,” the audit notes.

Healy said those costs are in addition to the average $20,758 pension that Wisconsin retirees earn. That is an average, some retired state workers are earning nearly $200,000 a year.

“This taxpayer-provided benefit for state employees is an extra, it is above and beyond their pension. And it is becoming a very expensive extra,” Healy said.

The audit notes that the costs for retiree health insurance could go up, depending on factors such as enrollment and the state’s discount rate.

Healy said lawmakers in Madison should take note of the rising costs, and look to do something about them.

“Given how challenging the next state budget is likely to be because of Governor Evers’ decision to lockdown the economy and the difficult decisions the Governor and lawmakers will need to make to fill an expected dip in tax revenue, this extra benefit should be on top of the chopping block,” Healy told The Center Square.

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