CASPER — State lawmakers are scrambling to adjust after a confidential attorney general’s opinion issued last week ruled that municipalities could choose to enroll in the state’s employee health insurance plan.
The opinion – which was issued on the request of the state’s Division of Administration and Information in January – comes after the City of Riverton asked to engage in the state’s employee insurance program.
According to Ralph Hayes, the manager of the program, the opinion allows city, county and town governments to enter into the 120-day enrollment process immediately.
The opinion gives municipalities the same treatment under the law as Wyoming school districts, which have been permitted to cover their employees under the state plan since legislation was passed in 2010 allowing them to do so. Only one school district in the state – Natrona County’s – now does so.
“They have to abide by the same rules,” said Hayes. “It’s not just automatic.”
Local governments are not required to join the state’s public insurance plan under the AG’s opinion. But doing so could have ramifications beyond government. Insurance industry representatives warned that moving municipal governments to a public plan could have implications on the private insurance market, including the potential to drive up costs.
While the AG’s opinion was discussed by state lawmakers at length throughout Monday’s meeting of the Joint Committee on Corporations, Elections, and Political Subdivisions, the public was not able to access a copy of it prior to or during the discussion. According to a representative at the Attorney General’s office, the opinion was protected under attorney-client privilege between their office and the state Division of Administration and Information, which manages the state’s group insurance program.
A&I later provided a copy of the opinion to the Star-Tribune.
The Attorney General’s opinion seemed to have caught state lawmakers – as well as the private insurance industry and advocacy groups – by surprise.
Lawmakers were provided a copy of the AG’s opinion shortly before Monday’s meeting, and groups like the Wyoming Association of Municipalities, the Wyoming County Commissioner’s Association, and Wyoming Blue Cross Blue Shield had not viewed the opinion prior to public comment at Monday’s meeting.
While municipal groups have pushed for the option for several years, groups like Blue Cross Blue Shield urged caution, arguing that municipal governments moving from private insurers to a public insurer could potentially have unseen implications on private insurers and their customers.
“I would say at this point in time, they would like to stop this, and have the Legislature not allow cities, towns and counties to do this,” Hayes said.
Wendy Curran, a lobbyist for Blue Cross Blue Shield, expressed concern that the language used to describe the state plan made it sound like the state was trying to compete with the private sector, though Hayes said his organization has done little to market or promote itself as an option.
“To me that’s a different message than offering yourself as an option,” said Curran. “It says ‘we’re going to compete with the private market with a state-funded, state-operated option to what’s provided on the private market.’”
While the prospective impacts of up to 3,700 state and municipal employees leaving private insurers are uncertain, Curran warned opening up public insurance pools to municipal governments ran the risk of pulling certain groups out of the private market, which could potentially drive up costs and increasing the ratio of high-risk individuals in insurance pools, increasing rates.
“You’re saying we should not just be concerned about what it would do to the state plan, but what it would do to the private plan and our constituents as well?” asked Sen. Bill Landen, R-Casper.
There are some positives for municipalities to go public. While it’s not a universal truth, some municipalities could enjoy significant savings by moving onto the state plan, according to a fact sheet distributed at Monday’s meeting. Some counties – like Crook County – paid as much as 14 percent of their annual budget in health insurance costs last year while others, like Sublette County, paid as little as 1 percent.
Only one county in the state – Niobrara – does not offer health insurance to public employees.
State lawmakers, meanwhile, were at odds on how to respond. While legislative action could be considered, Rep. Scott Clem, R-Gillette, suggested that the executive branch could potentially be involved, while Sen. Charlie Scott, R-Casper, floated the idea of carving out municipalities in a budget footnote in 2020.
It is unclear what implications the AG’s opinion might have on the state’s finances or on the private insurance industry, which many of the state’s municipalities use to provide benefits to their employees. According to the fiscal note of a similar bill proposed in 2015, offsetting the state’s 23 counties onto the state’s insurance plan would have netted the state nearly $10.6 million in revenues – well off of the $53 million currently paid by the counties today.
However, it is uncertain how many counties or municipalities would actually participate. While all 48 school districts in Wyoming have the option to apply for coverage under the state plan, only Natrona County’s has done so. Other municipalities, meanwhile, might save more on the private market, or be less prone to some of the volatility that can occasionally be experienced in a public insurance program.
Rep. Tara Nethercott, R-Cheyenne, argued that any financial implications to the state would be negligible but, before passing any legislation, she would prefer to see actual data on the impacts, and to develop a thorough understanding of the issue.
“All of that needs to be evaluated,” she said. “The horse is out of the barn – that’s what’s happening.”