Tuesday, March 8, 2011
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Insurance premiums for state employees, retirees, teachers and school personnel could increase by as much as 67 percent next year because the state has a $250 million shortfall in its health benefits program.
If the state makes up the newly discovered shortfall only with premium increases, costs could rise by two-thirds for employees, teachers and state government retirees. That would mean an extra $100 to $200 or more per month for many of them.
House leaders learned last week of new calculations showing a $250 million hole in the program, which was already slated to cost almost $3 billion, House Speaker David Ralston told The Atlanta Journal-Constitution on Tuesday. The shortfall will occur in the upcoming fiscal year, which begins July 1.
"It was a surprise," Ralston said of the report by state budget officials. "They laid out a scenario that is very troubling. That's why this is an issue that we've had to focus on over the last couple of days."
The State Health Benefit Plan insures 692,000 state workers, agency retirees and dependents and school system employees. The state is a self-insurer, meaning it provides money for the fund and pays the workers' health insurance claims itself. Employees pay about 25 percent of the cost and the government, 75 percent.
Plan officials had warned of shortfalls last year after budget cuts had helped whittle down a surplus that hit about $472 million in 2008.