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Map of California Special Districts (CSDA)

CA Taxpayers Paying Wildly Inflated Costs for Public Employees’ Health Plans

‘The providers are exploiting the government’

By Katy Grimes, September 9, 2019 7:03 am

While private sector employers and workers are spending a bigger share of their income on their own health insurance plans, they don’t know they are also spending a bigger share of their income on public employees’ health plans.

“Spending 52 percent more than the market average for public employees’ medical insurance is costing California taxpayers at least $3.3 billion annually, according to a Transparent California analysis of 672,000 payroll records from more than 1,500 individual government agencies statewide,” Robert Feller with Transparent California said in a California Globe interview.

“The only reason I published this is because I looked back and they’ve always had these obscene plans,” Feller said. “The providers are exploiting the government.”

Feller said the most expensive plans were found within California’s special districts, which likely reflects the fact that personnel costs for these agencies are a comparatively smaller percentage of total expenses, which makes excessive spending less noticeable to ratepayers and the public. Special districts just aren’t on many taxpayers’ radar.

At more than triple the market average, the $29,923 average cost at the Central Contra Costa Sanitary District was the largest of any major government agency statewide, Transparent California found. Yet in July, Feller said Contra Costa has passed a 21 percent rate hike.

48 district employees received medical plans that cost at least $51,148 apiece. Plans that expensive almost certainly reflect price gouging, rather than additional value provided, as explained in more detail below.

Feller said some of the worst examples are:

  • The $80,665 paid by the Water Replenishment District of Southern California on behalf of the agency’s communications director was the most expensive plan statewide.
  • The Los Angeles Department of Water and Power had 151 employees who received medical plans that cost the district over $57,800 apiece.The agency-wide average of $20,935 means that ratepayers would save nearly $110 million annually if the district’s health costs were reduced to the market average.
  • LA Metro ($21,757) and the San Francisco Bay Area Rapid Transit District ($19,449) would have saved $63.5 million and $33.5 million, respectively, by paying the market rate. Click here to see a list of special districts surveyed.
  • The cities of Whittier ($23,918), Milpitas ($21,543), Alameda ($21,150), Richmond ($19,588), Santa Cruz ($19,255) and Oakland ($19,133) all had average health costs of more than

“Spending over $50,000 on a single employee’s health insurance plan is an inexcusable waste of taxpayer funds,” said Fellner. “Medical plans this expensive simply don’t exist in the broader market, which is a strong indication that providers are exploiting the fact that these governments are happy to pay inflated prices with other people’s money,” Fellner added. 

He noted that some cities were managing costs responsibly. “Cities like Ventura, Pomona, Newark, Hanford and several others are all behaving in a fiscally responsible manner when it comes to health costs,” Fellner said. “The city of San Diego and many area transit districts are likewise paying reasonable costs,” Fellner continued, “demonstrating that there is no legitimate need for other agencies to pay such inflated rates.”

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11 thoughts on “CA Taxpayers Paying Wildly Inflated Costs for Public Employees’ Health Plans

  1. “Wildly Inflated”, really? “Market average” usually means far less coverage that covers far less. So don’t blame public employees for receiving full coverage, blame the insurance companies for inflated pricing. You get what you pay for. Obviously public employers care more about their employees in regards to quality health care by providing far better health insurance.

    1. I’m going to agree. The article is criticizing the coverage for sanitary workers, how ridiculous. The majority of these employees are subjected to biohazardous waste throughout their shift. Seems like good coverage is a fairly logical use of money.

  2. Really! Katy Grimes. you bitch about Taxpayers paying for
    Public Employees ‘ Health Plans Plans but is OK for Taxpayers paying for FREE Health Care for the Illegals
    Free Welfare, Food Stamps, free Education, housing and
    Legal Assistance and Drivers License. You are an Idiot and a Trump Hater.

    1. Look in the mirror before making such stupid comments….

      Ms. Grimes has consistently reported on the waste of taxpayer funds on illegal immigrants, as well as this article that exposes

  3. Esther,
    The point was the amount of money being payed by a government funded district for certain employees is well above the average cost of a healthcare package in other districts. That is the issue. Katie Grimes is not advocating for free healthcare for illegal aliens, that wonderful philosophy belongs to the Democratic senate/assembly/governor.In both instances, it is government making illogical decisions with taxpayer money. Do you want that to continue?

  4. Great article. I would like to see articles like this on doctors and lawyers who want to be paid, regardless of performance. Every other profession is subject to some performance standard before payment. Imagine giving your credit card to a store when you walk-in, being charged a non disclosed rate before you select any product.

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