S.C. taxpayers will have to come up with at least an extra $84 million in next year's budget to cover the rising cost of state workers' health insurance.
That is nearly double the increase that was required in this year's state budget. The added cost is just another straw on the back of a state budget already laboring under hundreds of millions of dollars in additional health care requests.
"This year, the revenue is up, but what we can do with that revenue is limited, and so I, for one, am finding it very frustrating," said state Rep. Jim Merrill, R-Berkeley, chairman of the House budget subcommittee that oversees the state health plan's budget.
For state employees, the added cost could translate into a 4.5 percent increase in their health insurance premiums, or an extra $21.62 a month.
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The biggest reason for the health care increase is higher costs for prescription medications. Overall, medical costs for the state health plan are increasing by nearly 7 percent. But pharmacy costs are increasing by more than 14 percent, according to a study by the state's pension consulting firm.
Lawmakers have little control over the design of that health plan. That job falls to the newly created Public Employee Benefit Authority.
Authority chairman Arthur Bjontegard said one explanation for the higher drug costs could be that too few state workers and their beneficiaries use the (usually cheaper) mail-order prescription drug program.
Last year, with a budget flush with new state revenues, lawmakers chose to pay for 100 percent of state workers' higher health insurance premiums. But the Budget and Control Board, at the request of Gov. Nikki Haley, overruled that and instead split the increased cost with state workers. State workers sued, and the state Supreme Court will hear their case at 11 a.m. today.
Haley's proposed budget includes a 50-50 split with employees to cover the higher costs in the state's fiscal year that starts July 1. Merrill, the House budget subcommittee chairman, said he expects the House to approve that split.