S P E C I A L
R E P O R T
What is BUBB
Doing for State Employes?
Many New Programs
Brought to Employes
Through Competition
by Douglas Crooks
Many state employes cannot
give an answer when asked the
purpose of the Bargaining Unit
Benefits Board. Of those who
do know it administers insur
ance programs for over half
the State’s employes, many
ask, “What does BUBB do for
me?”
To say that BUBB has gotten
state employes the best bene
fits possible sounds like public
relations hype. A look at the
performance of this State
board though, shows this
heady statement to be true.
Prior to BUBB’s creation in
August of 1979, state em
ployes had little say in the
d e s ig n
o f t h e ir
in s u r a n c e
benefits packages, nor were
they allowed to use all the
dollars they negotiated for
these benefits. Instead, they
were locked into an insurance
plan designed by the man
agement-dominated Oregon
State E m ployees B e n e fit
Board.
With the formation of BUBB
an atmosphere of competition
was created. The result has
been the offering of a far
greater range of insurance
programs.
Under BUBB, state em
ployes have:
• Three times the number of
free health insurance pro
grams other state employes
are offered, including a com
prehensive family health plan
at no monthly out-of-pocket
premium.
• The choice of health main
tenance organization (HMOs)
program s in 20 counties,
rather than in 10 counties;
• Free dependent dental ben
efits;
• A health plan design that
keeps h o s p ita l u tiliz a tio n
below the national average
and thus keeps overall costs
down; and
• A stabilization fund, where
negotiated benefit dollars that
are not used to pay premiums
are used in succeeding years
to hold down the impact of rate
increases. Prior to BUBB,
these dollars stayed in the
State agency budgets.
In the past two years the
programs offered by SEBB
have also improved, but it is
interesting to note that these
improvements have usually
been a copy of programs that
BUBB had already imple
mented. In fact, when SEBB
asked insurance companies to
bid on its plan design for 1981-
1982, Blue Cross was the only
company to formally reply and
they dictated changes in plan
design that were virtually
identical to the plan that was
already being offered by
BUBB.
Despite its demonstrated
ability to design and imple
ment creative, cost-effective
insurance benefit programs,
BUBB’s very existence is being
threatened by a Legislature
that is demanding that more be
done to stop the spiraling cost
(continued on page 8)
Addressing a Dilemma:
Trade-Offs in Demands
for Wages and Benefits
by Chuck Mendenhall
It comes as no great revela
tion that health care costs have
increased astronomically over
the past decade. In fact, from
1965 until 1980, the total
expenditures for health related
services in the U.S. increased
over 420 percent. Doctors*
fees, hospital fees, lab fees
and, at the end of the progres
sion, insurance prem ium s
have risen proportionately to
this four-fold increase.
It is obvious that costs in this
area have far outstripped the
rate of inflation. Less evident,
but equally alarming though, is
the growing problem of the
fewer dollars that are available
for wages as benefit costs
escalate.
In the 1979-1981 State
budget, approximately $725
million . was earmarked for
personnel expenses. In the
1981-1983 budget, that dollar
figure has grown to over $1
billion. The increase in wages
Annual Local, State & Federal
Government Health Expenses;
% of National Health Expenses
*ln part, the increase in health care costs for public employes is
due to the increasing numbers of federal, state and local
employes. In 1965, the total number of federal, state and local
employes was 10.1 million. By 1980, employes in these govern
ments had increased to 16.2 million.
and benefits and the balance
between the two is receiving
heightened attention from all
impacted groups and should
be of real concern to employes
and to the State as well.
This issue becomes much
more graphic when you look
closely at the current salary
and benefits package between
the State and OPEU. Part of
the salary settlement included
a flat $55 per month increase,
while increases necessary to
meet basic health and dental
insurance needs amounted to
another $95 per month. It is
evident that the balance is
weighted heavily toward bene
fits—a trend that is almost sure
to continue as insurance costs
Increase.
To be sure, the sharp
increase in insurance costs—
both to the employe and to the
State—has not gone un
noticed. Oregon legislators
are exam ining th is issue
closely and may make some
significant and critical deci
sions regarding state em
ployes’ insurance benefits in
the near future.
The charge facing state
employes and public sector
unions is clear—they need to
become absolute experts in
the health care field. They
must bargain strongly and
then stretch negotiated bene
fits in an effort to provide the
best insurance value that is
available.
The Bargaining Unit Bene
fits Board, which OPEU helped
create in 1979, has four union
representatives and is working
hard to develop the best
insurance coverage at the
low est costs fo r all rep
resented employes. The work
of the board will not be enough
though, unless state employes
and their unions also make
significant contributions to
addressing the dilemma of
rising health care costs.
Mr. Mendenhall is chairman of
the Bargaining Unit Benefits
Board.
Page 5