Employees feel lost in insurance crisis

'Why should I be punished because I work for the state?'

Erica McDiffett has been relying on her health insurance a little more than usual lately, taking her 2-year-old son to the doctor once a month for chronic ear infections.

Dropping the insurance, which covers her and three children, isn’t an option, she said.

So McDiffett, an administrative specialist with Kansas University’s parking department, was outraged to learn her insurance premiums would be increasing 37 percent at the beginning of the year. Co-pays for doctor visits and prescriptions also are going up.

For McDiffett, the 1.5 percent salary increase provided to state workers this year will provide an extra $6.40 per week. But her insurance premiums are increasing $17 per week.

“I’m taking another pay cut this year,” she said. “We’re not going hungry because of this. I’m not the family that’s going to be on welfare because of this. But it does hurt your pockets. You work for the state, and you think if you dedicate your time and effort, you’ll get rewarded for it.”

McDiffett is one of thousands of relatively low-paid state workers who find themselves in the same boat. But unlike other Kansans who are working and poor, McDiffett, because she works for the state, is ineligible for an insurance program specifically meant to help people in such circumstances.

Governor approved

Depending on choice of plans and coverage options, insurance premiums for state employees will increase to $33.50 per week from $9 per week for family plans, and to $14 from less than $1 per week for individual plans. Employees have a choice of three HMO and three PPO plans.

The Kansas Health Care Commission unanimously approved the rates in August. The commission includes Howard Fricke, who is Gov. Kathleen Sebelius’ secretary of administration, Insurance Commissioner Sandy Praeger, and two employee representatives.

Erica McDiffett, center, an administrative assistant in the parking department at Kansas University, has seen her health insurance costs soar. From left are Erica's sons Jordan Brown, 9, and Jasper Mumford, 2, and her husband, Chiron Mumford.

Linda DeCoursey, health benefits administrator with the Kansas Department of Administration said the increases were necessary because of higher payouts on state health plans.

She said premium increases could have been larger, but the Department of Administration has worked on curbing costs by doing such things as encouraging generic drug use.

“It could have been worse,” she said. “Still, we’ve made very positive changes in our plan, we still offer comprehensive coverage. If you want to stay in an HMO option you can, or it’s your choice to buy up if you want.”

DeCoursey said she realized the insurance increases negated raises for many state employees. But she said having discussions about insurance costs and pay raises at the same time “would not be feasible.”

No HealthWave

For McDiffett, the blow could be lessened if she could join the HealthWave program, which provides low-cost health insurance for children of families who are low-income but who earn too much to qualify for Medicaid.

“HealthWave is something available to anyone else in this situation,” she said. “Why should I be punished because I work for the state of Kansas?”

About 10 percent of state employees earn salaries low enough to make them eligible for HealthWave, according to a new study.

But the program, funded with federal dollars, doesn’t allow state employees access to the program. So those parents must either buy more expensive insurance provided by the state or go without.

“You can’t even print what I think about that,” said Betty Vines, president of the Kansas Association of Public Employees.

Two years ago, the Legislature approved a bill that would have provided financial assistance to low-income state employees to cover insurance for their children.

‘It’s worthless’

But the Legislature never funded it, so the initiative has never gone forward.

“They’re good at passing things to make themselves look good, but then they don’t fund it, so it’s worthless,” Vines said.

State Treasurer Lynn Jenkins was instrumental in getting the bill passed when she was a legislator, but said establishing the program was contingent on a study done of how much it would cost the state.

That study has recently been completed. It found that from 3,300 to 3,700 state employees “would potentially qualify for the employer contribution envisioned by the statute.”

The cost to the state would be from $1.2 million to $4.56 million, depending on the level of the financial contribution provided.

Limited options

Jenkins said that cost would actually save money in the long run because more children would receive less expensive health care instead of resorting to more expensive options, such as emergency room visits.

“I think it’s probably a bargain for the state,” Jenkins said of the cost estimate. “When I was researching for that legislation, I found that people were waiting to go to the emergency room. That just costs everybody more.”

Vines said the increasing cost of health insurance, combined with small pay increases over the past several years, had driven many state employees to seek better-paying jobs.

“People who want to stay with the state are getting to the point that they can’t afford to stay with the state,” she said.

Lawmakers in recent years have passed significant tax breaks for private businesses “but they don’t do anything for their own state employees,” Vines said.

Sebelius flip-flop

The increase in health insurance was approved by the Sebelius administration a year after she denounced a round of state employee health insurance increases while she was campaigning for governor.

But Sebelius’ office defended her new position, saying an increase this year couldn’t have been avoided.

“Health-care costs are skyrocketing across the United States,” said Nicole Corcoran, the governor’s spokeswoman. “We are facing unprecedented financial challenges as a state and a nation.”

At KU, the No. 1 state employer in Lawrence, administrators were bracing for upset employees during the enrollment period for health plans.

Madi Vannaman, assistant director of human resources, said KU had little input on the increases.

“The decisions are made elsewhere and we have to live with those decisions,” she said. “We’re just the messengers. Don’t shoot us.”

And as employee premiums are increasing, the state’s employer contributions also are going up. KU will spend nearly $15.2 million next year on its employees’ health insurance, up 21.5 percent from this year.

Lindy Eakin, KU’s vice provost for administration and finance, said he saw no end to the spiraling costs.

“It’s a huge problem,” he said.