Monday, July 27, 2009

Helding for Socialized Health Care

I have to take issue with Greg Helding with such regularity that I am concerned that he might think its personal. It isn't personal Greg. It is all about policy. The following quote is from the Racine Post article on a local health care forum. Read it all here

Alderman Greg Helding (above) discussed the potential impact of health care reform on the local level. Helding estimated 20 percent of the city's budget pays for employees' health care. Switching to a single-payer system that charges an 8 percent payroll tax would save the city millions of dollars it could use for additional street maintenance and city services, like police.

This year alone the city is expecting an 11 percent increase in its health care costs, Helding said. Over time health care costs could grow to 10 times the amount of the city's property tax levy, a number that is simply unsustainable, he said.

"(Health care) costs us a lot of money and it's increasing rapidly," Helding said.

Greg has it partly right. We are spending a ton on medical care for city employees. My guess is the reason for that is that virtually everything is covered ( viagra etc...), there is little co-pay or employee contribution towards premiums etc... Thus we have created incentives for employees to overuse the health care system since others are paying the bill. Of course this is a recipe for the financial disaster that is looming in Racine and no doubt elsewhere. But Greg Helding thinks that nationalizing the idea that is bankrupting Racine would be a good idea.

Not a good idea. Our local politicians over the years have offered benifits to municipal employees that are now obviously unsustainable. Faced with this looming disaster that they created, they now want to foist the bill on to federal government/taxpayers. The problem of course is that every local or state government entity that has been irresponsible will be doing the same. Not sure how any savings will miraculously appear out of such a maneuver.

52 comments:

colt said...

It's easier to pass the buck then show leadership. The issue Helding may face is the thought of his being a Rino.
IMHO Helding can't run with the Fox's and cry with the Hounds.
Nor can he beat Dickert if there is no real difference between the two.
Off topic a bit be interesting to see how Helding and others handle the upcoming issue with the old Livingston Landing vs the Chen's

Greg Helding said...

Denis,

The Post didn't get one of the quotes right. When I talked about a figure 10 times our tax levy, I was referring to our long term (30 yr) post-retirement costs for healthcare, or our 'GASB 45' number, which is about $374M. I guess it is actually closer to 9 times our yearly tax levy, but 10 is a nice round number.

Actual healthcare costs to the city are about 20% of our budget. We have had some good years recently and some bad years. The increase for fiscal year 2009 was projected at 11%. At that rate, our costs would double in 8 years.

Neither article about my participation in this event mentioned my support of "single payer" or "socialized health care", because I voiced no such support at the event. My point was not that we should adopt a single payer system. In fact, I said that I was not advocating that. My point was that something needs to be done to control costs or we will be in big trouble. If 80% of our costs (salaries, materials, etc) increase at a rate of 2% per year and 20% of our costs (healthcare) increase at a rate of 11% per year, in 10 years, healthcare would eat up 35% of our budget. In 20 years, healthcare would be more than 50% of our budget.

From my experience at the city level, the current level of costs and the rates of annual increase simply cannot continue as is. They are unsustainable.

As I said at the forum, I am not sure the answer is a single payer system. It probably isn't. However, if something (tort reform, transparency laws, etc) can bring costs down, city property taxpayers will benefit.

In order to bring the numbers we are talking about into perspective, I used some concrete examples. In recent years, the state, the feds, and others have talked about a single payer system with a roughly 8% payroll tax. I talked about what this would mean to the city from a fiscal standpoint. If healthcare cost the city 8% of payroll instead of 27%, we could (in the first year):

1) Pay for the healthcare costs.

2) Cover other cost increases, whether from inflation, wages, or the state budget.

3) Spend $4Million more on street repairs or whatever city services were needed.

4) Deliver a 15% property tax cut.

I doubt this would happen, but it puts the amount of money we spend on health care into perspective. The city has been doing things to keep costs down. Healthcare is an issue whenever we re-negotiate a union contract. We have implemented the city-county health clinic. We have a wellness program and other initiatives to reduce usage - which reduces costs. The root problem is that the cost of what we do use is so high.

I don't know what the answer is, but I know that something needs to be done and it cannot be done at the local level. I know that the high costs are causing problems for city government and city taxpayers. I know that reduced healthcare costs could mean improved city services and lower costs to property taxpayers. That is what I said at the forum.

Denis Navratil said...

Greg, thanks for the clarification. But when you speak publicly about the savings to the city if there is a single payer system, don't be surprised if people mistake that for an endorsement.

Greg Helding said...

Denis -

I assure you that, by now, I am not surprised at all when my comments are mistaken or misconstrued. It often happens when the print media takes a long discussion from a meeting and boils it into one or two sentences.

Real Debate said...

The very thought that city employees would allow themselves to be relegated to Obamacare is ridiculous.

In my estimation when Obama gets his plan, and he will, all federal state and local employees should have to go on it.

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