Benefits and Drawbacks
The insurance plan for state employees will have a $140.4 million shortfall next year — and that's the least of its problems. The projected shortfall for the two years after that is $880 million, and it will take another $476 million to replenish the legally required contingency fund. The Employee Retirement System and state leaders are surprisingly mellow about the red ink, saying growth in the cost of health benefits has actually stabilized at around 9 percent. But steady and large increases in costs threaten to erode the program, leaving policymakers to consider cuts in benefits, to negotiate lower prices or to find vast amounts of new money. Full Story