I don't understand the relationship between Wisconsin's Act 10's collective bargaining and health plan costs.

In his book, "Unintimidated", former Governor Scott Walker claims several times that this provision allowed municipalities to greatly decrease their health plan costs for public workers (not including fire and police), but he doesn't really explain why. I mean the union is still there, so they can still strike if they don't like the plan, right? What changed? The book describes much greater competition among health insurance companies, but does not really explain why that competition increased.

1 Answer 1


Wisconsin, prior to Scott Walker and Act 10, had an exceptionally public sector union, which had created a health insurance benefit that had two facts the law aimed to address

Union employees contributed less towards their health care

Prior to the law mandated changes, the average contribution was small

In the 2010-11 school year, Forbes said the average employee contribution for health premiums was 5 percent for family plans and 3 percent for single plans.

The law mandated employees contribute more (with a goal of 12%)

[E]mployees at more than 100 districts – approximately one-quarter of Wisconsin’s 422 public school districts – paid less than 12 percent towards their monthly health insurance premiums in the 2017-18 school year. Still, that’s a far cry from 2010-11, when 43 percent of all districts paid the the entirety of their employee premiums on single plans every month. Today, just 6.4 percent of districts pay employee premiums in full.

Health insurance could be bid out

Apparently unions could dictate which insurance could be purchased

The analysis found that Wisconsin saved $3.36 billion by requiring government employees contribute a reasonable amount to their own retirement. The analysis also estimates local units of governments saved an additional $404.8 million total by taking common sense steps like opening their employees’ health insurance to competitive bidding. Milwaukee Public Schools saved $1.3 billion in long-term pension liabilities, and Neenah saved $97 million in long-term pension liabilities in addition to other savings.

Nobody goes into detail as to what that renegotiation entails, but it's quite possible the unions had their own deals with health insurance providers, and mandated their use in contract negotiations. Since the state picked up all premiums in many districts, there would be little incentive to select economical plans.

Remember, the net effect of Act 10 was to weaken collective bargaining in Wisconsin. With weaker unions, many government agencies were free to make decisions that the unions likely would have objected to prior to the law.

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    Your last point gets to the question. So, I understand everything you wrote, but it still doesn't really make clear to me exactly what was in the old law that allowed the unions to dictate the insurance that the new law changed. What exactly changed? Apr 1, 2020 at 17:25
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    @TylerDurden The law weakened collective bargaining in general, which enabled some government agencies to make different decisions than the unions would prefer. Having read about a dozen articles on both sides about this, that is the one point they all agreed on.
    – Machavity
    Apr 1, 2020 at 17:32
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    There was mention that the union benefited in some way(s) from the insurance companies it chose which charged higher than market rates mostly paid by the government. I don't think anything was proven but such an arrangement is ripe for kickbacks and other self dealing. Driving business to a preferred supplier that charges above market rates and getting kickbacks is a common pattern for corruption in supplier relationships.
    – Brian
    Apr 1, 2020 at 19:41

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