Update, Update, Update: Out of Public and Media Sight, the HB 5345 Committee Plods On

The special state House committee that has been holding hearings on House Bill 5345, the  mandatory government-run state health plan legislation sponsored by Speaker Dillon, met again on February 11. It was the first public meeting of the full committee for some weeks. Since before Christmas, committee members have been meeting in smaller work groups — usually closed to the public and media — to closely examine certain parts of the bill. The purpose of the February 11 hearing was to allow committee members who chaired the work groups to offer status reports. Here is a brief summary of what was reported by the work group chairs:

1. First, none of the workgroups was able to say precisely how much money the mandatory government-run plan would save, if it would save any money at all. While one of the work groups said administrative savings would result from having one giant pool made up of all public employees (active and retired)and all public employers, a dollar amount was not offered and no source for the estimate was provided. Vague percentages offered in ranges was the best the work group could do. The Speaker has claimed savings of up to $900 million. Only the Speaker’s staff has agreed with the estimate. The House Fiscal Agency and other independent experts have testified it is not possible to accurately estimate how much the bill would save or if the bill would save a dime. In fact, several witnesses have testified that it would cost the state about $900 million just to create and operate (in the first year) a $5 billion health insurance plan for 1.5 million Michigan public employees.
2. One workgroup chair said having a voluntary statewide prescription drug benefit plan that would be mandatory for state employees and optional for local governments and school districts could save money. But the chair of the work group said it is not possible to quantify how much. He said he believes it will save money because “bigger” means savings.
3. At least two of the work groups said some provisions of the bill would result in certain legal challenges because the legislation raises serious constitutional concerns. “Someone is going to court” if the bill passes, one work group chair said.
4. Currently, the bill would create a 13-member board, appointed by the Governor and legislative leaders, to oversee the new mandatory state government insurance plan. Members of the board would change with every new Governor and set of legislative leaders. One of the work groups recommended expanding the size of the board to 29 political appointees. So, a bill that would already create the largest expansion of state government in decades would also be run by an even larger panel of political appointees. We’re not certain there is another board larger in all of state government.

We will continue to post updates as the work groups plod on.

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