Domestic Partner Benefits: Not as Costly as You Might Think
OhMyGov.com
By Jaime L. Hartman
October 7, 2008

The ability to compete with the private sector to recruit top-notch workers is often cited as a main argument in support of the federal government extending health care and other benefits normally reserved for married couples to same-sex domestic partners. In fact, recent polling shows that 69 percent of Americans believe that same-sex partners should receive benefits. Now, a new report suggests that the cost of extending benefits would be relatively low, limiting the financial rationale for withholding benefits from same-sex partners.

The Center for American Progress, a non-partisan think tank, released a report last month called “One Simple Step for Equality: States prove that the federal government can offer domestic partner benefits with ease.” The report examines the 15 states and the District of Columbia who have offered domestic partner benefits to state employees to extrapolate the difficulty and cost of a potential expansion by the federal government. This is a timely concern as Congress is currently considering the Domestic Partner Benefits and Obligations Act (H.R. 4838/S. 2521) which would extend health benefits, along with the other rights and responsibilities of married couples, to federal employees in same-sex domestic partnerships.

In 1994, Vermont became the first state to offer benefits to domestic partners of state. Arizona will become the most recent state with a domestic partner benefits program, effective this month. The other states currently offering some form of domestic partner benefits are New York, Hawaii, Oregon, California, Connecticut, Maine, Rhode Island, Washington, Iowa, New Mexico, New Jersey, Montana, Alaska, and Illinois.

The District of Columbia also offers benefits to domestic partners of employees. Some of these states, such as New York, include both same-sex and opposite-sex couples.

The report finds that in these states’ experiences, the costs of expanding the benefits has been negligible; the process has been smooth; potential employees have been attracted by the benefits and current employees have been more inclined to remain; and providing the benefits has lowered the cost of other social services, leading to net savings for the states.

The states show that a domestic partner benefit program for federal employees would likely have the following characteristics:

Low enrollment: Only 0.7 percent of Connecticut state employees took advantage of the domestic partner program for same-sex couples. Fewer than one half of 1 percent of state employees in California have applied for their partner benefits since they have been offered.

Minimal costs: In Iowa, only 0.5 percent of benefit spending goes toward domestic partners. Montana has seen no noticeable increase in benefit costs to the state and has found that generous benefits help keep the state competitive in luring workers because many are willing to accept decreased salaries when they enter the public sector.

Higher retention and recruitment rates: As more private-sector employers offer domestic partner benefits, states such as Vermont and Washington have found that matching this benefit helps them to attract the best workforce.

Strong public support: When Arizona considered offering domestic partner benefits in 2006, 787 of the 913 public comments made were supportive of extending the benefits.

No one argues that extending benefits will be cost-free – if that were the case, health care wouldn’t be a major presidential campaign issue this year.

The Williams Institute at the University of California Los Angles School of Law predicted that 14,436 same-sex partners would enroll, adding $60.4 million to health care spending in the first year. Senator Joseph Lieberman (I-CT), said during a hearing last month on the domestic partner legislation he introduced, that the Congressional Budget Office had placed the 10-year cost at $670 million. While acknowledging the expense, Lieberman also pointed out the small scale of $67 million per year to a total federal budget of $3 trillion.