POWRS (Protect Our Wisconsin Retirement Security), February 19, 2017

Dear Joint Finance Committee Members:

POWRS has closely followed events leading to the Wisconsin Group Insurance Board (GIB) approval of the self-insurance program proposal. We have been and continue to be deeply skeptical of this proposal. We believe that since the health insurance marketplace is already in turmoil due to dismantling of the Affordable Care Act (ACA), conducting such a radical change puts not only public employees, but all insured citizens and ultimately Wisconsin taxpayers, at unnecessary risk.

As a member of the JFC, final approval falls to you. POWRS urges you to defer approving self-insurance until the following critical questions are satisfactorily answered:

(1) What are the likely effects of shifting a quarter million public employees from the current, HMO-based health marketplace to a state managed system?

(2) What is the economic impact of making this radical change? Will there be job losses, premium increases, coverage changes for all insured Wisconsinites? What level of additional risk and cost is facing Wisconsin taxpayers?

(3) Is the $60 million “savings” promise a reliable figure? Does it take into account changes to ACA, increased administrative costs, and reserve requirements? Deloitte, an earlier consultant, said the change could cost as much as $100 million dollars. Who is right?

(4) What is the impact on the Wisconsin public workforce? Will additional financial burdens for public employees, who have already absorbed large pay cuts due to insurance/pension payments over the past several years, drive our “best and brightest” from public service?

(5) Segal Consulting has been the sole consultant preparing analysis and recommendations for this proposal. Given this proposed radical change, doesn’t it make sense to conduct a third-party audit to assure everyone that all data, analysis, and “savings” are realistic and based on fact?

(6) The rush to implement self-insurance for January 2018 is creating its own additional risk. Given the many lingering questions and uncertainties, isn’t it advisable to slow down the process to conduct proper vetting and third-party auditing before vendor contracts are prepared?

Our conclusion: America’s entire national health care system is facing an uncertain future with ACA repeal in March. Disrupting Wisconsin’s HMO-based marketplace for 260,000 public employees with an untested and rushed proposal further risks creating significant health chaos for everyone. We believe that this is the worst possible time to enact such a seismic change.

POWRS Steering Committee: Philip Anderson, Judy Foust, William Franks, Kay Johnson, Joyce Luedke, Kathleen Marsh, Patrick Murphy, Roger Springman *POWRS is a statewide group of activist volunteers who protect the Wisconsin Retirement System (WRS) and seek retirement security for all.