WEA Trust remains confident in its long-term business model despite seeing its revenue decline by $70 million since the passage of the state budget repair bill, according to a report in the Wisconsin State Journal.
The Madison-based group health insurer, which provides health insurance coverage to Wisconsin school districts, has lost business because the controversial 2011 budget repair bill made it easier for Wisconsin school districts to switch insurers.
In 2011, WEA’s revenue fell by 8%, from $867 million to $798 million. WEA Trust said it expects to recover lost business as it expands beyond school districts to municipalities and individual state employees.
Among other things, the controversial budget repair bill curtailed collective bargaining for public employees and forced state and local workers to contribute more to their health and pension benefits.
WEA’s critics refer to the company as the Wisconsin Education Association Council’s insurer, and charged that prior to passage of the budget repair bill that WEA Trust had an unfair advantage over other insurers when it came to landing school district insurance contracts. As a result the budget repair bill, they note that school districts that switched insurers were able to cut costs by million of dollars.
The company has noted that a competitive landscape existed prior to passage of the bill, and many school districts chose other vendors.
Passage of the budget repair bill sparked a series of Senate recalls in 2011, and the fallout continues this year with June 5 recall elections targeting Gov. Scott Walker and four Republican state senators.
Walker’s critics say the bill resulted in $500 million in cuts to public education, including teacher layoffs and larger class sizes.
Walker has been touting the benefits of the bill, noting that it has allowed the state to close most of a $3.6 billion budget deficit, and that school districts and municipalities that applied its provisions were able to cut costs while avoiding massive layoffs.
On Monday, the Walker administration announced that statewide property taxes for the typical homeowner went down for the first time in 12 years. Â The administration said the tax bill for the median value home is $39 per homeowner lower than originally estimated by the Legislative Fiscal Bureau when the 2011-2013 budget was passed.
Without the budget modifications, the administration said the average homeowner would have paid an additional $700 in property taxes over the biennium.
