Governor Romney’s budget raises the contribution rate for state employee health insurance premiums from the current "tiered" plan based on income to a 75%/25% percent split for everyone. The Governor’s language would further require the GIC to pay for 75% of "the aggregate cost" of the plans. This would permit the GIC to set varying premium share rates, depending on which plan a worker selected. This would create financial incentives to drive people into the cheapest plans with the worst coverage. The legislature rejected similar proposals last year.

• State employees have been hit with truly traumatic increases in health insurance over the last two years. In FY ’03, state workers were forced to pay $30 million in increased co-payments and deductibles. In FY ’04, most workers were forced to pay 33% more for their premiums. Enough is enough!
• The Governor’s proposal shifts authority over state employee health insurance premiums from the legislature to the administration.
• Health insurance is a necessity, not an extravagance. Public employees are our social workers, elderly care givers, public safety personnel, and many others. Health insurance is the most valuable benefit that these workers receive, and an important reason why many talented people remain in state service despite relatively low wages. Further cutting this benefit will drive more talent out of the public workforce and decrease the quality of public services.

Rather than adopt Governor Romney’s draconian proposals, we respectfully urge the legislature to make two modest changes from last year’s plan:

1. Alter the 75%/25% premium split for new hires to match the premium split for all other workers. The purpose of the tiered system designed by the legislature was to protect low paid workers from high health insurance costs – a laudable goal. However, new hires must pay for 25% of the cost of their premiums, so the lowest paid workers are actually paying the highest costs (new hires generally earn less than their colleagues). We ask new hires be put in the same system as everyone else. As there have been very few new hires over the past year, this change would cost very little in FY’05.
2. Implement a one-year freeze on any co-payment or deductible increases. This will prevent the administration from going around the legislature and squeezing still more money out of workers.
3. Include language in line item 1108-5200 that honors the collective bargaining agreements of the MBTA unions.