City Looks to Stabilize Health Insurance Costs

For most local governments, escalating health care costs are easily among the biggest fiscal challenges.

Oak Creek officials say they are no different, and they are developing a plan to stabilize health care costs in the short term and eliminate some costs in the long term. 

The long-term fix involves phasing out health care for retirees: the city will no longer offer post-retirement health insurance to new hires, City Administrator Gerald Peterson said. 


In the short-term, city officials are working on a three-year plan to present to the Oak Creek Common Council for approval. 

Oak Creek must act, Peterson said, because projections show the cost for retiree medical benefits rising from $1.8 million in 2013 to $2.9 million by 2021 if the city's benefit structures are kept intact. 

"With frozen revenues, that doesn't work," Peterson said. 

Peterson and Oak Creek Mayor Steve Scaffidi said they are sensitive to dumping all of the increased costs on employees. The goal is to provide the best health insurance possible at stabilized rates, Peterson said.

"We want to work with employees, the end users of those benefits, to make sure they understand the steps we have to take," Scaffidi said. 

In recent weeks, the city has increased the amount employees are paying for health insurance and partnered with Wheaton Franciscan on a near-site center for the next three years, as the Oak Creek NOW reported.

Alderman Ken Gehl said failing to get control of health care costs could dramatically impact city services. 

"Health care costs and retirement costs are really the black hole of budgeting," Gehl said. "It really is the thing that's going to cripple governments moving forward if we don't ... address it."