Patrick Marley, and Jason Stein

Milwaukee Journal Sentinel

MADISON – Gov. Scott Walker is banking on saving $60 million in taxpayer funds over two years by changing the way public employees get health insurance, but legislators are deeply skeptical of the proposal.

In the state budget he unveiled Wednesday, the governor detailed plans to shift the state to a self-insurance system to cover employee health care costs. But his fellow Republicans who control the Legislature questioned whether the state could generate the savings Walker is counting on and said the change could hurt the insurance market for individuals and small businesses.

Republican legislators have resisted the proposal in the past.

"I still have the same concerns I had before," said Rep. John Nygren (R-Marinette), co-chairman of the Joint Finance Committee that will make changes to the budget over the coming months.

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The state's current approach gives employees a choice of health-maintenance organizations aligned with local providers. That forces them to compete on price and quality, particularly in the Madison area.

Under a self-insured program, the state would pay the actual cost of providing health care to its employees, instead of paying premiums to HMOs. The state and its employees would routinely set aside money — similar to premiums — to cover those costs.

Critics caution the state could wind up paying more for health care under such a system.

"I'm doubtful these savings are actually there," Assembly Speaker Robin Vos (R-Rochester) said of Walker's plans.

The state Group Insurance Board approved the changes Wednesday, but lawmakers would need to sign off on them for them to take effect.