Governor Markell recently proposed to the State Employee Benefits Committee increases in the monthly health insurance premium and health care deductibles for active and retired State employees and their dependents. The Governor has made a difficult, and long overdue, decision, and deserves commendation for making it.
State employee and retiree health care costs have been rising exponentially and are not sustainable. The claims have jumped 20% over the past three fiscal years and the latest Pew Trusts analysis estimates that the State of Delaware has unfunded long term health care liabilities of $5.6 billion.
Data from the U.S. Bureau of Labor Statistics shows what the Governor proposes is not onerous. The State pays for almost 91% of the employees health care premium. Nationwide, state and local governments pay 87% and the average in the private sector is just 79%.
According to the BLS, the average pay for workers in service-providing industries in Delaware was $51,647 in 2013 while the average pay for Delaware state government employees that year was $53,450. The 2013 BLS occupational wage survey for Delaware shows an average wage of $39,130 for full time workers in protective service occupations while 2013 State of Delaware payroll data shows annual pay for full time workers in the Department of Corrections to be over $46,800.
As difficult as these adjustments will be, unfortunately as the Affordable Care Act rolls out over the next four years, the worst may still be ahead.
Dr. John E. Stapleford
Caesar Rodney Institute
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