Teachers, state employees and state retirees ought to be clear about what just happened with their controversial health-insurance plan. So should Georgia taxpayers.
Yes, some of the worst features of the new insurance plan that was foisted upon employees this year will now be abandoned in the wake of changes adopted unanimously Monday by the Department of Community Health board. Most notably, the potential that state employees might have to pay thousands of dollars out of their own pockets for medical costs before insurance kicks in has been eased.
However, such changes amount to a reprieve — a very temporary reprieve — that is designed to last until the November elections, and not much longer. After that? Well, let’s just say that the significant benefit cuts that drew such outrage from public employees and retirees this month will likely seem minor compared to those that will hit in January 2015, once our political leadership is safely re-elected.
That’s because two fundamental facts remain unaddressed:
1.) The state of Georgia has made important, basic commitments to a wide range of people — schoolchildren, employees, retirees, commuters, businesses, child-abuse victims, college students, those needing medical care, among others.
2.) The state has chosen to deny itself the financial resources to honor those commitments, and we’re only beginning to see the long-term consequences of that decision.
It is of course true that a big part of the resource shortfall is due to the consequences of the Great Recession, but that doesn’t begin to tell the whole story. You cannot logically brag about having the lowest state taxes in the country, as Gov. Nathan Deal did once again in his State of the State address earlier this month, and then pretend that your pursuit of that goal has nothing to do with the fact that you’re almost broke. These things are intimately, directly related.
Take a look at how this most recent problem has been “solved,” because it tells you a lot about the kind of problems that are going to be popping up throughout state government. The improved benefits package is being financed not by an increase in what the state contributes to insurance for its employees, but by taking $114 million from an insurance reserve fund that was already too low. Once that option has been used, it can’t be repeated. In effect, the DCH board has dug themselves even deeper in the hole to get through November and solve the governor’s political problem.
Deal has tried to sidestep blame for the problem by attributing the benefit reductions and increased costs to Obamacare, but that’s a gross and obvious exaggeration. Yes, benefit changes required by the Affordable Care Act have had an impact. But state officials also admit the changes were implemented in hopes of saving them $200 million. A review of the state’s books will reveal that this particular crisis has been building year after year, budget after budget, independent of anything happening at the federal level.
As health-insurance costs have increased, for example, state contributions to the plan have decreased. As the number of public employees has fallen, so has the number of people contributing to the plan. And to make matters even worse, state officials have used the insurance reserve fund as if were a piggy bank, raiding it to finance other priorities.
In fiscal 2009, for example, then-Gov. Sonny Perdue and the state Legislature drained the reserves of the State Health Benefits Plan by hundreds of millions of dollars, citing need for the money elsewhere in the budget. They did the same in 2010, and that money was never restored.
Instead, even as they claimed that financial necessity gave them no choice but to raid reserve funds, state leaders were passing major tax breaks for businesses that cost the state hundreds of millions of dollars in revenue. It was a matter of priorities, and repeated tax cuts were deemed more important than protecting employee benefits or any number of other commitments, including keeping schools open for 180 days a year.
At some point, that catches up to you. At some point, you run out of quick patches and temporary solutions.
That’s how we got here. I don’t know how we get out.
