Most everyone is familiar with how insurance deductibles work: You cover the first dollars out of pocket and then, when the expenses reach the threshold under your policy, the insurance kicks in and pays the bills.
The thresholds vary by policy and the damage incurred, but the idea is that property owners, vehicle owners, business owners and people needing medical care can better afford to handle several hundred or even several thousand dollars in costs, knowing their insurance will cover the really big numbers.
It makes sense, sparing people and businesses who are not at fault of costly repair bills, medical costs and damage claims. That’s the deal insurance companies make when they write policies, figuring they will profit by paying out less in claims than they earn on premiums and investments over the years — depending on hurricanes, tornadoes, floods and windstorms.
If insurance companies can share the risk and protect themselves against losing money, why can’t the public protect themselves against losing money on irresponsible elected officials? Think of the damage that poor policy decisions cause — particularly personnel decisions — and whether it is fair that the public always pay 100% of the cost.
That’s where a deductible could help.
Think of the several million dollars the state treasury, the Kenai Peninsula Borough and Municipality of Anchorage have paid out the past few years in court-ordered damages, attorney fees and negotiated settlements to fired employees, harassed employees and public employee unions that won their cases against the governor and mayors.
The money has gone to state employees who were fired for not agreeing to pledge loyalty to the governor; to Kenai Borough employees who were harassed by the mayor — a mayor who later ran for governor, thinking maybe that skill would serve him well in higher office — and to Anchorage municipal employees dumped by a mayor who is no role model for good governance.
No question that the public treasury should defend elected officials who are only doing their job, making decisions but getting sued because someone disagrees. Clearly, government needs to defend mayors, governors and legislators in cases such as disputes over permits and project approvals, the constitutionality of legislation and spending decisions.
But the cost to the public of paying damages and legal expenses of ill-mannered, ill-tempered and ill-willed personnel actions is getting out of hand — certainly out of pocket from public funds.
A possible solution would be to require elected officials to help cover such claims, but not the small amounts similar to a $500 deductible on a car accident or $1,000 deductible on medical bills. That nickel-and-dime stuff would be more an annoyance than a deterrent.
Why not a reverse deductible for errant elected officials? The public picks up the small stuff and the elected official is on the hook for large court orders and negotiated settlements. They might not think twice, or even three times about paying a $1,000 deductible for their next harassment or illegal firing claim, but knowing they could be at risk of the $250,000 court order or settlement might make them stop and consult a real lawyer instead of some political appointee.
It might lead to better decisions if they have to think of their own checkbook.
Even better, it could restore balance between the need for elected officials to make hard decisions and the public’s need not to pay for the really lousy and illegal decisions.
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