"Thus, Wisconsin’s OPEB (other post-employment benefits) obligation due to its health plan represents a significant prospective financial burden on employees and taxpayers and should be reformed. Indeed, without early and meaningful reforms, the rapid projected growth in health care costs will likely escalate this financial burden and require additional contributions from active members and state taxpayers," the report reads.

NCPA senior fellow John Graham said during Wednesday's briefing that the organization believes funding assumptions in the state's health insurance program are unrealistic, based on rosy projections of health care cost increases.

The report suggests retirees should pay higher premiums, copayments and deductibles.

It also recommends that the state close the current program for employees below age 45 and any future employees. Those employees would be shifted to a new, pre-funded plan. The most straightforward approach, Gokhale wrote, would be to introduce health savings accounts for those younger and future employees.

"A reform along these lines would go a long way toward helping the state reduce its unfunded health plan liabilities and leave more general fund revenues for developmental, environmental, education and other needs," Gokhale wrote.