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Monday, January 23, 2006

Ind. Law - More on legislators' health care: What was the press reporting at the time? Conclusions

[This is Part II of the two entries posted today. Part I, from this afternoon, may be found here, or by scrolling down this page.]

I watched WFYI's Indiana Week in Review last weekend. "Lifetime Health Insurance for Lawmakers" was one of the topics discussed. The lead-in featured Rep. Billy Bright, who it was said won election in 2004 in part by criticizing the plan. He called it "an egregious benefit."

To answer the question "Will there be a big turnover next year", meaning will House members retire while they are still eligible for the plan, Rep. Dave Crooks talked about how valuable the benefit was for legislators like himself -- he runs a small business and has two young children. He looks to be under 40. More on this later.

The panel discussion was superficial. One panel member actually said that the expense was not that great. When someone responded "now" she continued "in the larger school of things, compared to the Medicaid budget"! As they wound up, Mike McDaniel asked the reporters: "Where were you guys when all this was going on? Where was the press? Jon Schwantes said "that's a good question." Jim Shella said "That is a very good question."

I was astonished. I knew about these bills at the time, in 2001 and 2002. Rep. Billy Bright had to know about them since, as they said in the program's introduction, he won election by criticizing the plan. And of course Brent Waltz defeated longtime senator Larry Borst by running against legislative perks.

I knew about these bills because I read about them in the Indianapolis Star at the time. For some reason, the Star has had only minimal coverage of the issue of legislators' benefits this year, but it was not always so.

This weekend I went to the Star's pay-for-view archives and downloaded ten stories (they have a plan where you can download 10 within 24-hours for $9.95). Here are the descriptions you receive:

Lawmakers expand benefits package
August 21, 2001 •• 956 words •• ID: ind47336723
State lawmakers didn't get the pay raise they wanted this year, but they got something else -- better health insurance and improved retirement benefits. The benefits package afforded to Indiana's part-time lawmakers now rivals what top private-sector companies offer their full-time employees, financial experts say. "They are very generous," said Grace Worley, a certified financial planner. Indiana lawmakers receive a base salary of [BUY]

No raise but plenty of fringe benefits
August 25, 2001 •• 481 words •• ID: ind47402121
Our position: State lawmakers got a tad too generous with themselves when they adopted a new benefits package last session. In the last session of the General Assembly, members approved a pay raise for themselves. Base salary would rise from $11,600 to $19,000, which would have been acceptable, given the fact that lawmakers hadn't had a salary increase since 1985. Gov. Frank O'Bannon, however, vetoed the legislation. The rebuff shouldn't be too hard to [BUY]

Legislators jump gun on pension loans
October 4, 2001 •• 793 words •• ID: ind48028884
The rules haven't even been adopted yet, but Indiana's lawmakers already are seeking loans from their pension plans, a perk they awarded themselves earlier this year. Seven lawmakers filed applications last month to borrow a total of $276,000 from their retirement funds. Tom Parker, director of the Legislators Retirement System, said the names of those lawmakers are confidential and will stay so. General Assembly members voted this spring to give themselves the [BUY]

Bill would provide health benefits to 'retired' legislators
May 14, 2002 •• 1108 words •• ID: ind55654413
The state fiscal crisis awaits lawmakers when they return to work today. On their list of things to do: Erase a nearly $1 billion budget deficit, kick-start an ailing economy and help homeowners worried about higher property taxes. But first, legislators may help themselves. Today, they're expected to vote on a bill that could help members of the General Assembly pay for health insurance once they retire. The Senate has scheduled an override vote on Gov. Frank [BUY]

No time for perks in budget crisis
May 16, 2002 •• 558 words •• ID: ind55698673
Our position: The Senate's priorities are outrageously out of line. Indiana's economy is in shambles. The budget is $1 billion in the hole. Jobs are pouring out of state by the thousands. And how do state senators spend the first day of a special session devoted to tax and budget issues? Debating whether to pad their own benefits. The Senate on Tuesday took up an override vote on the governor's veto of a bill to subsidize health insurance of retired [BUY]

Insurance extended to former legislators
March 30, 2003 •• 2347 words •• ID: ind63595961
Amid calls last summer to trim spending, with a nearly $1 billion budget deficit looming, Indiana's two top lawmakers quietly activated a dormant state law to give retired legislators a new perk: taxpayer-subsidized health insurance. It's unusual for government and private-sector workers to get this benefit. But ex-legislators now can remain in the state's insurance plans after serving just a little more than six years. And retired members of the General [BUY]

Legislative perk is a crying shame
April 1, 2003 •• 550 words •• ID: ind63651133
Our position: New insurance benefits for retired lawmakers should leave taxpayers in tears. Money to educate Indiana's children has been slashed. Thousands of families are waiting for needed services. State employees have had their salaries frozen. State parks have closed facilities. The cuts occurred after Indiana's $2 billion surplus collapsed into a nearly $1 billion deficit. So how did state legislators respond to the financial crisis? By giving retired lawmakers [BUY]

Lawmakers put pension details under lockdown
March 15, 2004 •• 1300 words •• ID: ind83264346
Although lawmakers accomplished little in their latest session, the General Assembly did pass a bill to make sure details about their individual pensions remain secret. The same bill, which wouldn't affect access to information about the legislature as a whole, also keeps the lid on taxpayer-financed retirement plans of judges, prosecutors and law enforcement officers. The provision was tucked inside a House bill late in the legislative process and approved without the [BUY]

This deal's so good, they want it secret
March 16, 2004 •• 394 words •• ID: ind83310528
Our position is: The public does not stand to profit from pension privacy the legislature voted for itself. T he Indiana General Assembly did not accomplish a great deal this past session in the way of child protection or environmental protection, but it took a lengthy stride in the direction of self-protection. Passed easily in both chambers and slipped through without citizen input, House Bill 1285 bans public inspection of taxpayer-financed state employee pension funds, including [BUY]

Behind the curtain: Legislators' compensation
September 5, 2004 •• 1600 words •• ID: ind65714249
John Bartlett defends the proposal to increase state legislators' salaries by 159 percent. Bartlett, chairman of the Public Officers Compensation Advisory Commission, notes that legislators haven't received a pay raise in 21 years. Yet Bartlett admits he didn't check out legislators' perks. Like the $134 per day each one receives during sessions for food and lodging expenses. It adds up to an additional $8,174 a year. Then there's [BUY]

Bosma: Now not time to end costly health plan
March 14, 2005 •• 2832 words •• ID: ind76183502
The Republican leader of the Indiana House has killed proposals to cut back or eliminate taxpayer-subsidized health care for former legislators, even though several Republicans in key races were elected last fall after campaigning for the changes. Speaker Brian Bosma, R-Indianapolis, who was swept into power after his party took control of the chamber last fall, acknowledged that offering lifetime health care to former lawmakers has become costly and hard to justify. But he said now is not [BUY]

What did I learn?

I learned that the taxpayer-subsidized health plan covers not only legislators for life, but their widows and children, widows for life and children until age 25. So Rep. Crooks is right when he says how valuable the plan is to him. If he retires this year at age 40 (hypothetically), the benefits cover him for life, his wife for life if she survives him, and any children to age 25. Divorced spouses and widows or widowers of former legislators are also covered.

The May 14, 2002 Indianapolis Star story, by Kevin Corcoran and Michelle McNeil, makes it clear that the facts indeed were reported at the time. Some quotes:

The Senate has scheduled an override vote on Gov. Frank O'Bannon's veto of Senate Enrolled Act 506, which would create a special fund that could be tapped by retired lawmakers. Up to $750,000 a year would flow into the fund, with much of the money coming from the savings realized when legislative documents now printed on paper are published electronically.

The Senate measure was written in tandem with House Enrolled Act 1196, which spells out how this special fund could be used. The intent: to pay for health insurance for lawmakers who "retire" after serving little more than six years and legislative staff members who meet the same retirement requirements other state workers must meet.

When the bills wound their way through the legislature earlier this year, few lawmakers knew what they did or how they were related.

Not even the Senate bill's author, Sen. David Ford, R-Hartford City, was told how the money would be used. His bill would require many legislative documents to be available by computer.

"My intent was to save the state some money. I had no idea this was going on," Ford said.

His legislation is one of several bills approved in the past two years that, taken together, allow taxpayer money to be spent on health insurance benefits for retired lawmakers.

House Speaker John Gregg, D-Sandborn, and Senate President Pro Tempore Robert D. Garton, R-Columbus, declined to say when, or if, they'll sign off on subsidized health care for retired members if Senate Enrolled Act 506 gets approved.

Once they do sign off, getting rid of this cushy benefit would take some doing -- the full legislature would have to vote to revoke the subsidy.

House Minority Floor Leader Michael Smith, R-Rensselaer, and Phil Sachtleben, executive director of the nonpartisan Legislative Services Agency, were behind the benefits legislation.

Smith and Sachtleben say the money was meant to create a new retirement benefit for retired legislative staffers. But both concede it could benefit former lawmakers, too.

Three-fourths of active lawmakers -- or 112 of the 150 members -- receive taxpayer-subsidized health benefits. But just three former legislators get these benefits, in part, because they must pay the full cost.

The story also points out in a sidebar on legislative perks titled "Here's what they get": "Generous retirement accounts, with taxpayers kicking in $4 for every $1 legislators contribute."

In a front-page story dated March 30, 2003 by Kevin Corcoran [this is the story to buy from the archives, if you are buying just one, as the entire story covers 8 pages], the Indianapolis Star reports:

Senate President Pro Tempore Robert Garton and then-House Speaker John Gregg -- after declining to say when or if they would do so -- signed off on the benefit in July. The two legislative leaders did so by invoking the 2001 law in a two-page letter to the State Personnel Department.

Their letter was sent just two months after the Indiana Senate failed to summon enough votes to override Gov. Frank O'Bannon's veto of legislation that would have created a dedicated fund to pay for the benefit. The fund would have been financed by savings from distributing legislative documents electronically instead of on paper.

Because the special fund has not been created, money is coming directly from Indiana's shrinking general fund, the "checking account" in which sales, income and other taxes used to run state government are deposited. [Note: I still don't understand how this money has been appropriated]

"I didn't have any problem signing off on it. I think it's a benefit that's deserved," said Gregg, a Sandborn Democrat who's now practicing law with an Indianapolis firm. "It was already the law. We just hadn't gone ahead with it."

Fourteen retired lawmakers -- including some who left for higher-paying public offices or lucrative lobbying posts -- have purchased the coverage, according to House and Senate officials. [There are more now.] One spouse of a deceased lawmaker also has signed up. * * *

Although cost estimates are done for virtually every new law, no one in the legislative branch bothered to figure the cost to taxpayers of extending insurance to retired legislators.

"It's minimal right now," said Garton, a Columbus Republican.

Using state insurance data and details of the health plan, The Indianapolis Star estimates taxpayers will pay at least $114,150 this year to provide the coverage, at an average of $7,610 per person. Costs of the lifetime benefit could balloon as more ex-legislators join. * * *

House Minority Leader Brian Bosma, R-Indianapolis, declined to defend the new perk.

Most state workers who retire, including the nearly 1,400 who recently took the governor's retirement incentive package, don't have access to subsidized health insurance. Conservation police, Alcoholic Beverage Commission officers and State Police personnel are exceptions. * * *

The plan's architects -- former Rep. Michael Smith, R-Rensselaer, who quit abruptly after the 2002 fall election to take over the Casino Association of Indiana, and Sen. Harold "Potch" Wheeler, R-Larwill -- are among those who've signed up.

Finally, this story from March 14, 2005, by Kevin Cocoran, headlined "Bosma: Now not time to end costly health plan." [Buy this one if you buy two Star stories.] Some quotes:
Attacking the perk was a winning issue for Republicans in November. After eight years out of power, they gained a 52-48 House majority based partly on candidates' pledges to rein in a health care benefit most Hoosiers could only dream about.

The benefit is available to former lawmakers, their spouses, surviving spouses, divorced spouses and dependents. Twenty-two former lawmakers and one ex-lawmaker's surviving spouse are signed up, House and Senate records show.

Lawmakers who leave the General Assembly after serving at least part of four, two-year terms -- or just more than six years -- are eligible for the benefit. Former members of the General Assembly can keep buying coverage after they qualify for Medicare at age 65, limiting what they would have to spend on prescription drugs.

This year, ex-lawmakers receiving the benefit pay between $710 and $1,900 a year for family dental, health and vision coverage.

That's a savings of $3,343 to $12,800 over the amount retired state employees pay for the same levels of coverage. Retired state employees can continue on the state health plan until they reach 65 if they pay the employee and employer shares of state health premiums.

Outside collective bargaining agreements, such generous retiree health benefits are rare in the private sector, said Craig Copeland, senior research associate for the Washington, D.C.-based Employee Benefits Research Institute, a nonprofit, nonpartisan group.

Nationally, he said, most businesses are capping the amounts they are willing to pay, forcing large annual premium increases on retirees. Companies also are saving money by excluding new hires from post-retirement benefits or eliminating retirement health benefits for workers younger than 40. In addition, many retirees have lost post-retirement health care through corporate mergers and bankruptcies. * * *

Bosma said he's concerned that too many ex-lawmakers with high-paying, private-sector jobs are taking the benefit. Five ex-lawmakers who became lobbyists upon leaving the General Assembly have signed up for the program.

One of them was Michael Smith, a Republican representative from Rensselaer who helped craft the benefit and quit abruptly after the 2002 fall election to take over the Casino Association of Indiana. Smith did not return a call seeking comment.

The benefit for retired lawmakers was made possible by a 2001 change in state law. Money to pay for the benefit comes from Indiana's general fund, the "checking account" in which sales, income and other taxes used to run state government are deposited. * * *

One obstacle Bosma faces to reining in the health benefit for former lawmakers is strong opposition from Senate President Pro Tempore Robert D. Garton, R-Columbus.

Garton and then-Speaker John Gregg, D-Sandborn, signed paperwork to begin offering the benefit for former lawmakers in mid-2002 despite calls then to cut state spending to help close a $1 billion deficit. * * *

The plan was activated in mid-2002 for ex-lawmakers and in February 2003 for retired legislative staffers.

This story ends with a list of the then 22 former legislators receiving taxpayer-subsidized health insurance, with their ages and current occupations. Among those listed are former Senators Larry Borst (lobbyist with Baker & Daniels) and William Alexa (now a Porter County trial judge). The majority of the former Representatives listed as receiving the benefit are in their 40s and 50s. Former Representatives include Mark Kruzan (mayor of Bloomington), John Gregg (attorney), Michael Smith (casino lobbyist).

My conclusions.

It is not enough to end the benefit only in the House and not the Senate. And it is not enough to end the benefit in the House starting with Representatives elected in 2006. The entire program must be abolished.

Why on earth should taxpayers, many of whom cannot afford their own health care costs, be subsidizing the lifetime health-care costs of former legislators (many of whom are decades from true retirement age), their spouses, their widows or widowers, their ex-spouses, their children under 25, their staffers (and presumably their staffers' spouses, children, etc.). Incredible.

[For earlier related ILB entries, select "Legislative Benefits" from the list of categories in the right column, or by selecting "Legislative Benefits" in the line directly below this entry.]

Posted by Marcia Oddi on January 23, 2006 05:06 PM
Posted to Indiana Law