Remember how public-employee unions in Wisconsin howled when the legislature and Governor Scott Walker proposed and implemented reforms that took benefit packages off the table in union negotiations, allowing the state to get out of the union’s own WEA Trust cash-shifting monstrosity and achieve real savings? At least Walker and the Republicans planned to keep offering those benefits while keeping the unions from inflating costs to build their own coffers. Now, Milwaukee County executive Chris Abele wants to dump all 4400 public employees out of their health-insurance plans to push them into ObamaCare exchanges, in order to save $10 million a year:
Milwaukee County would end health insurance coverage for some or all of its 4,400 employees and instead provide a subsidy toward individual coverage purchased through the new federal exchanges, under an idea floated in County Executive Chris Abele’s 2014 budget.
The shift could save the county at least $10 million a year, according to an estimate included in Abele’s budget, which must be approved by the County Board. But that estimate is based on hypothetical figures, not the actual cost of health plans that will be available in the Milwaukee marketplace.
The exchanges are a key part of the Affordable Care Act, commonly known as Obamacare. The online marketplace for Wisconsin begins enrolling people Tuesday.
The idea was based on advice given to Abele by David Riemer, senior fellow at Community Advocates Public Policy Institute, a local anti-poverty agency.
Whether the complicated idea would work is still up in the air, Riemer said in an interview. It needs a more thorough vetting and could take longer than a year to work out, he said. Among the questions is how the proposal could be implemented without county workers having to pay taxes on the money given them to buy a health plan on the exchange.
Why, those dastardly Wisconsin Republicans — attacking PEU members and their benefits packages again! Er … not quite. Although the Milwaukee Journal-Sentinel never gets around to mentioning this fact, Abele is a Democrat. In fact, after Abele claimed not to have been a partisan during his candidacy for his current job in January 2011, Politifact Wisconsin begged to differ:
He has given heavily to Democratic Party office-seekers here and around the country, to the Democratic Party itself and in 2002 was on the campaign finance committee for Jim Doyle in his first race for governor.
He has plugged funds into key state legislative contests outside Milwaukee that were important for determining the balance of power in Madison. Among the recipients closer to home: Pedro Colon, Lena Taylor, Sheldon Wasserman and Jim Sullivan — now a foe in the exec’s race.
His federal donations have helped Wisconsin congressional candidates Russ Feingold, Dave Obey, Steve Kagen and Tammy Baldwin, as well as Paul Wellstone of Minnesota and Michael Bennet of Colorado.
In 2004, Abele lined up attendees at a Ted Kennedy fundraiser for John Kerry’s presidential bid. And in 2008, Barack Obama got a check.
All right, enough of Name That Party. What about the proposal? Abele may be right about saving millions of dollars, but he used models based on costs in other states to generate the $10 million figure. Still, it appears that Abele sees the same cost dynamics in play that have prompted Walgreens and Darden Restaurants to push employees into private exchanges. The difference between the two is that taxpayers will be subsidizing these public employees in the exchanges, both through the extra compensation offered from the county and in the ObamaCare subsidies in the exchanges themselves.
This raises two issues, both of which have large import on the fiscal underpinnings of ObamaCare. If Milwaukee County sees an advantage in dumping employees, even with the risk of the unions’ wrath, then private-sector employers will quickly see the same advantage and start dumping employees into the system, too. That will cause subsidy costs to explode much faster than the White House and the CBO predicted under its assumptions that competitive pressure would force employers to retain health-insurance benefits, and the entire financial structure of ObamaCare will rapidly sink into a deep ocean of red ink.
This also has a big impact on public-sector management policy. With most jurisdictions already facing nightmares in dealing with pension obligations — including health-insurance coverage — will ObamaCare be a de facto government bailout? Don’t expect Milwaukee County to be the only jurisdiction looking to take advantage of federal support on health-care costs via these exchanges.
Cross-posted from Hot Air.