DES MOINES — Mixed reviews followed Monday’s announcement by Gov. Terry Branstad and Lt. Gov. Kim Reynolds that they would voluntarily pay 20 percent of their state-funded health insurance premiums beginning Aug. 1.
Supporters called the move leading by example, while detractors viewed it as a way to bully state workers into taking a cut in compensation.
An executive order Branstad signed Monday establishes a new insurance plan whose participants can voluntarily pay 20 percent of their premiums for the rest of the calendar year. State officials and employees have until July 19 to enroll in the plan, which was approved by the Iowa Executive Council on a 4-0 vote.
“We’re asking for people to do the right thing,” said Branstad, noting that the Iowa Department of Administrative Services says roughly 88 percent of state workers do not contribute anything toward their health insurance premiums. In total, Iowa taxpayers fund 97 cents of every one dollar spent on health care premiums, according to the Governor’s Office.
Branstad also called upon all statewide elected officials, state department directors and state employees to follow his lead in volunteering to pay a share of health care costs. If everyone eligible for the new plan participated, the savings would exceed $100 million, he said at his weekly news conference.
Single workers agreeing to pay for 20 percent of their insurance premiums on the least expensive plan would save taxpayers at least $1,000 per year, he said. For Branstad, he said it would amount to an extra $224 monthly cost for his family plan, while Reynolds estimated the move would cost her about $153 per month.
“Hardworking Iowa taxpayers are accustomed to paying for some or all of their own health care costs, and for far too long, their tax dollars have also paid for the total cost of state employees’ health care,” Branstad said.
State Auditor David Vaudt and Agriculture Secretary Bill Northey said they planned to follow Branstad’s lead, as did state Senate GOP Leader Jerry Behn of Boone, who urged other legislative leaders to do the same.
However, Sen. Eugene Fraise, D-Fort Madison, who is retiring this year, said he viewed Branstad’s offer as demanding a pay cut on top of sacrifices state employees have already made.
“I suppose it made some sense to the Governor when he made this outrageous request, especially considering his own $130,000 salary, $50,000 state pension, free housing and transportation, and a state-funded personal chef,” Fraise said in a statement. “But the governor is ignoring the sacrifices that correctional officers, social workers, home health care and child care providers, mental health workers, and many other state workers have made during the national recession.
“Unlike the governor, these state workers have experienced furloughs, layoffs, pay freezes, and doing more work for no additional pay,” he added.
Danny Homan, president of American Federation of State, County and Municipal Employees Council 61 — the largest state employees’ union — said the GOP governor needs to stop playing politics and bullying public employees. He said Branstad’s voluntary insurance premium payment would amount to a pay cut of up to 18 percent for some newly hired state workers, while the cost to the governor would be about 2 percent at most of his yearly state compensation.
“For 18 months, Terry Branstad has been taking the same health care benefits as state employees and our members, while attacking our members at the same time. Yet he hasn’t paid a dime. For 18 months Branstad has been doing the same thing he attacked us for. Now, four months before the election, he is pulling a political stunt by volunteering to pay for what he has already received for eighteen months,” Homan said.
At Monday’s Executive Council meeting, state Treasurer Mike Fitzgerald, the panel’s only Democrat, abstained from voting on the new insurance premium plan because he said not enough information was provided in advance to make an informed decision.