Friday, January 15, 2010

First Week Accomplished

The first week of the second session of the 145th General Assembly is finished. The House even worked late on Thursday, wasting no time getting down to business.

The state will continue to have budget problems for FY2011 due to the economic recession. While it should be obvious, that fact needs to be restated. Delaware, along with almost every other state in the nation has seen revenues fall through the basement and needs (unemployment benefits, medicaid, etc) rise due to the recession. It confuses me to hear some policy makers continue to talk about our budget problems in the context of state government being too big. State government may or may not be too big. It may just need to adopt best practices and efficiencies and stop always using "the Delaware way" as an excuse for every parochial, out-dated, stubborn thing we do. However, regardless of all this, our money problems are the same money problems every state, county, city,business, and family in America is having right now. Let us not use the daunting and devastating challenge of the recession to berate government.
DSEA, AFSCME, and the Trooper Association are pushing for legislation to give us representation on the State Employee Benefit Committee. This is the committee that has governance over educator and state employee health plans. Currently, no stakeholders sit on the committee, only cabinet level people: Director of OMB, Controller General, Secretary of Finance, Treasurer, Secretary of Health and Human Services, Insurance Commissioner and Chief Justice of the Supreme Court.
In the early hours of the morning on Thursday, January 15th Labor (including the National Education Association) reached an agreement with the White House over a proposed excise tax on health insurance premiums. The US Senate version of the health care bill seeks to pay for the plan, in part, with a tax on health insurance premiums.

In the compromise, no union or public employees will come under the tax until 2018. The tax will start on family plans valued at $24,000 and single plans valued at $8,900. The tax is collected from the provider of the plans (employers, or health trusts). Presumably, the late enactment for these groups will provide time for the Feds to find a more reasonable funding mechanism, or for unions to adjust their bargaining strategies and place more emphasis on wages than benefits.

If this tax remains with us for the 2018 implementation, it will be problematic for education and other public employees who do not directly negotiate their health benefits. It will effectively result in a cap on the state's premium spending with either a reduction in plan benefits or increase in co-pays to keep up with health care inflation.
Thanks for reading and remember to check in often now that we are back in the legislative season.

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