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Editorial, 5/20: Don't ignore the elephant

Editorial, 5/20: Don't ignore the elephant

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State Auditor Mike Foley spotlighted some eye-popping numbers in his report on the high cost of health insurance coverage for state employees.

Officials in the executive branch were defensive. Fortunately, state legislators said they plan to address the issue.

It’s about time somebody did. Apparently this elephant has been in the Statehouse for a long time with no one willing to talk about it.

Among the findings:

* By 2011, the annual cost of insurance was almost $12,000 more than the national average.

* According to a 2009 study of the National Conference of State Legislatures, Nebraska’s monthly program costs exceed those of all other state employee insurance plans nationwide.

* The annual premium cost for state employees was $24,673. By comparison, the annual premium cost for employees at the University of Nebraska was $14,844. For the City of Lincoln the figure was $14,233.

The audit also singled out the case of a state employee who has not worked for the state for 17 years as “a particularly egregious example of ineffective oversight” by the Department of Administrative Services.

DAS Director Carlos Castillo said, however, that the employee was receiving health insurance benefits as a result of an agreement negotiated after a workplace injury left the employee legally blind.

On that particular detail, Castillo might have a point. The employee was not identified in the audit. Little is known about the details of the case, but it sounds sad and tragic.

In any event, that single case is only one among the 29,000 employees and dependents covered by the state. It’s the big picture that’s important.

And, as the report put it, the overall cost of the state health insurance program is “exorbitant.” Premiums paid during 2009-10 exceeded $182 million. The state pays 79 percent of that amount. The remainder is paid by employees.

Reasons for the high costs, the audit report said, included inefficient plan design, excessive administrative expenses and poor program monitoring and control.

Foley said the state could save about $9 million by redesigning its plan to resemble NU’s plan on features such as deductibles and coinsurance.

Castillo reacted combatively to the report, contending that it contained many omissions, mischaracterizations and unfounded assertions. He said that important improvements have been made in the plan since the period covered by the audit report.

Nonetheless, the costs of the state health insurance program are so out of line with similar programs that it’s about time someone blew the whistle. We hope that state senators keep the pressure on state officials to make improvements.


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