Archive for the ‘Health Care’ Category

Liz Murrill, the texting attorney who advised Commissioner of Administration Kristy Nichols that the Administrative Procedure Act (APA) was not necessary because the changes in the state’s Office of Group Benefits (OGB) plans did not meet the legal definition of “rule,” is gone.

Murrill sparred verbally with legislators during the Sept. 25 hearing on the proposed changes to OGB coverage of state employees and retirees by the House Appropriations Committee, telling them the APA was unnecessary in order that the Division of Administration (DOA) might implement huge increases to co-pays and deductibles that OGB members would be required to pay.

Throughout emotional testimony by OGB members who said their health care expenses might exceed their monthly pensions and others who related problems experienced with MedImpact, the state’s $350 million pharmacy benefit manager, Murrill could be seen texting while seated immediately behind witnesses. One observer said virtually the entire DOA staff sitting in the audience was also texting during testimony but only Murrill was constantly visible on the video being streamed live via the Internet.

But as embarrassing as that should have been to the administration, it was probably her advice that the APA was legally unnecessary.

Even an attorney general’s opinion released on Sept. 23, two days before the Appropriations Committee hearing failed to convince Murrill of her shaky legal position.

The opinion said the Jindal administration simply ignored the APA which requires a certain amount of publicity, public comment and legislative review before policy changes can be adopted.

But Murrill was quick to voice her difference with Assistant Attorney General Emily Andrews who authored the opinion at the request of State Rep. John Bel Edwards (D-Amite).

“We fundamentally disagree that the schedule of benefits meets the legal definition of ‘rule’ in the APA,” she said, “because it does not apply to the general public or any subset of the regulated public.”

Both Nichols and Murrill were grilled by a procession of legislators at the hearing, many of whom were not members of the Appropriations Committee but nevertheless had questions they wanted to ask on behalf of constituents.

At the times the exchanges became tinged with poorly concealed animosity as Nichols and Murrill fielded questions from one legislator after another once OGB members were finished with their testimony. The pair allowed their contempt for legislators surface from time to time while Legislators let it be known that they were losing patience with Jindal and his minions.

Murrill, while at the witness table, adamantly refused to concede that APA was required to be adhered to but on Tuesday (Oct. 14), once DOA had been called out on the matter and Murrill was out of the picture, APA notices of intent began going out toe legislators.

Once away from the table and back in the audience, she resumed her texting.

Now she has all the time she needs for texting.

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If the Retired State Employees Association (RSEA) goes forward with filing a legal challenge to the proposed changes to health care coverage for state employees, retirees and their dependents, it may have a significant hook on which to hang its case in a report submitted by a company contracted by the Jindal administration which attempted to base its plan changes at least in part on that same report.

If you’re confused, you should be for Commissioner of Administration Kristy Nichols laid the decision to make the changes in the Office of Group Benefits (OGB) plan at the feet of Buck Consultants but the firm’s report is in direct contradiction to the testimony of Nichols at the Sept. 25 hearing of the House Appropriations Committee.

The proposed health benefit changes are so radical for some 230,000 OGB members that the RSEA has scheduled a meeting with a law firm which has tentatively agreed to take the case on a pro bono basis, says Frank Jobert, RSEA’s executive director. http://theadvocate.com/sports/southern/10465870-123/retirees-considering-legal-challenge

RSEA is looking at the failure to go through the necessary legal procedures for approval of changes in plan benefits and “diverting” money from the OGB fund balance which has dwindled from a high of more than $500 million to less than half that amount and which is projected to go broke next year if changes are not implemented.

Nichols has consistently blamed the financial condition of OGB on rising costs she attributed to the Affordable Care Act (Obamacare). Critics, however, point to three straight years of decreased premiums that allowed the state to commit fewer state funds to its 75 percent match which in turn allowed the administration to divert those monies to cover budget holes even as the reserve fund continued to shrink.

Nichols was consistently evasive when asked during last month’s hearings of the House Appropriations Committee, three times managing to evade the direct question of who the actuary was who recommended decreases in premiums over three consecutive years.

Finally, State Rep. John Bel Edwards (D-Amite), who had already asked the question once without getting an answer, observed, “In fiscal 2013, there was a 7.11 percent reduction in premiums followed by 1.8 percent even though health care costs were going up by 6 percent.”

In questioning Nichols during the Appropriations Committee hearing, Edwards had accused the administration of taking a “self-manufactured crisis” and turning it into an emergency “because we had a fund balance that was healthy.

“We had OGB members who were relatively happy with the plan and today we have an unhealthy fund balance and OGB members who are very unhappy.”

He then asked again, “What actuary told you these reductions were sound?”

Nichols, who was already halfway out the door—before the committee meeting adjourned—on her way to taking her daughter to a One Direction boy band concert in the New Orleans Smoothie King Arena where she watched from the luxury box assigned to Gov. Bobby Jindal (R-Iowa, R-New Hampshire, R-Anywhere but Louisiana), replied, “Buck Consulting recommended a 2.25 percent decrease for calendar 2012.”


Well, not exactly. When one reads pages ii and iii of the summary report of the Buck Consultants Actuarial Valuation at 7/1/2013, a starkly different message is conveyed.


On Page ii, under the CLAIMS AND PREMIUM EXPERIENCE heading, the report says:

  • “Overall, the plan had favorable claims experience, resulting in a gain. The gain was offset by losses associated with premiums not increasing as expected. See Substantive Plan discussions below.”

Under SUBSTANTIVE PLAN on Page iii, the report says:

  • “It is our understanding that the Plan premium rates, used both to determine contributions from the various employer agencies and to set contributions required from the retirees, were set artificially low to draw down the OGB’s reserve fund… (emphasis added.) As noted above, premium rates were again lower than expected for this year’s valuation.”

Moreover, an email from Buck Consultants representative Tom Tomczyk to OGB CEO Susan West dated Sept. 28 (three days after the Appropriations Committee hearing) says, “The 2.25percent (rate decrease) was not a recommendation for January 1, 2012, but only used to validate our projections for the Fiscal Year 2012-2013. We did not recommend a decrease of 7 percent effective August 1, 2012, or an additional decrease of 1.77 percent effective August 1, 2013. Further, we were not asked to provide any recommended rate adjustments for any fiscal year beyond what we provided for Fiscal Year 2012-2013.”

In fact, according to that same email, Tomczyk said Buck Consultants was asked in late 2011 for its projection of the indicated rate increase for Fiscal Year 2012-2013. “At that time, based on the most recent claims information available, we projected a rate increase (emphasis added) of 1.75 percent needed as of July 1, 2012.”

An earlier email, on Nov. 12, 2013, from Tomczyk to West’s predecessor, Charles Calvi, who served as CEO of OGB from Jan. 9, 2012, to Jan 31, 2014, concluded, “We have not been asked to provide recommendations for rate adjustments since calendar year 2012.”

The consulting firm’s report, dated July 2014, noted significant decreases in several areas of net liabilities to OGB and gains in areas that benefitted the agency’s bottom line, according to two financial experts who were shown the report.

“As I see it, the Buck report directly contradicts the way Ms. Nichols has presented this,” one said. “Unless I do not understand plain English, Buck says, ‘Overall, the plan had favorable claims experience, resulting in a gain.’ How can a clear gain be a loss by anybody’s definition?”

He noted the following:

  • The actuarial accrued liability (AAL) for July 2013 was $103 million less than what had been projected in July of 2012, meaning that OGB was in better shape on July 1, 2013, than had been predicted. The AAL also increased by only $157 from last year when it had been projected to increase by $260 million.
  • The amount paid in claims was less than predicted and actually decreased the AAL by $195 million—and would have decreased it even more had premiums not been less than projected.
  • The report clearly attributes a loss to OGB of $388 million—totally a result of reduced premiums through Fiscal Year 2012 and that this loss was increased by additional decreases in premium rates in Fiscal Year 2013.
  • The report, on Page iv, minimizes the effect of the Affordable Care Act (ACA) on these calculations and points out that the ACA provided improvements in Part D coverage.

“I am frankly shocked at this report and what has been said about this whole thing by others,” he said. “Either I am totally stupid or it blows all previous explanations away.”

Edwards, commenting on the contents of the Buck Consultants report, said, “Nothing in this supports Kristy Nichols.”

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You have to hand it to Commissioner of Administration Kristy Kreme Nichols. When she has something to do, she is completely One Direction-al about it.

As the minutes ticked by during the House Appropriations Committee’s seven-hour hearing on the Office of Group Benefits on Sept. 25, and as Division of Administration (DOA) Executive Counsel Liz Murrill and the rest of the DOA pack occupied themselves by texting during heart-wrenching testimony from those who will be adversely affected by rising deductibles and co-pays, Kristy fidgeted.

She continued to fidget and to be as evasive as possible with her answers to questions from legislators until she suddenly “got an important phone call” and left the committee room. She did not return before the meeting finally adjourned.

In fact, it was not a telephone call that pulled her from the meeting at all.

One Direction, the latest boy band to make little girls squeal, was playing in the Smoothie King Arena in New Orleans and Kristy and her daughter (and possibly some of her daughter’s friends) watched the concert from the special Arena luxury suite assigned to Gov. Bobby Jindal (R-Iowa, R-New Hampshire, R-Anywhere but Louisiana).

Kristy Kreme at the Smoothie King. Has a certain ring to it, doesn’t it?

Kristy Kreme could have told the audience the truth. Certainly OGB members, mostly retirees, who had traveled from all over the state to testify and to get answers would have understood that a teeny bopper band was more important to Kristy Kreme than the medical coverage of 230,000 state employees, retirees and dependents.

But you see, telling the truth simply is not her style.

Witness her repeated claims that the OGB $500 million reserve fund was reduced to only about half that amount because of Obama Care and rising health care costs. She made that claim repeatedly, blaming those two factors and those alone for the drawdown of the reserve fund when everyone on the committee and those in the audience knew better.

Everyone in attendance knew that three consecutive years of premium reductions in the face of rising costs was the reason the fund has been all but depleted. She would never admit that even though everyone knew that Jindal lowered the rates so that the state’s 75 percent contribution to member premiums would be reduced also, thus leaving money that would have gone to premium payments for Jindal to use to plug gaping holes in his budget.

Remember when Kristy Kreme’s predecessor, former Commissioner of Administration Paul Rainwater wrote that comforting letter to OGB members in April of 2011 in an effort to debunk all those rumors about increased costs and raids on the reserve fund? No? Well, we have it right here: https://www.groupbenefits.org/portal/pls/portal30/ogbweb.get_latest_news_file?p_doc_name=4F444D324D5441344C6C4245526A51344E7A413D

In that letter, Rainwater said members would continue to receive quality service and coverage, benefits would NOT change, and OGB’s administrative oversight would continue, “securing the continued success of all the plans.”

“As for the allegation that OGB’s surplus will somehow be ‘stolen,’” Rainwater continued, “let me be absolutely clear: this claim is categorically untrue.”

But that was yesterday, as Chad and Jeremy sang back in the 60s, and yesterday’s gone. Let us return to the AWOL Kristy Kreme.

Even as she was invoking her super powers to convince legislators and audience members that she had only the best interest of OGB members at heart and that the depletion of the reserve fund was beyond the control of the administration, the report of Buck Consultants, hired by Kristy Kreme said on page iii of its summary: IMG_9230

  • It is our understanding that the Plan premium rates, used both to determine contributions from the various employer agencies, and to set contributions required from the retirees, were set artificially low to draw down the OGB’s reserve fund, and it is our further understanding that this is a temporary deviation from the Plan’s substantive plan, which continues to provide for the legislated 75-25 cost-sharing under a “full subsidy” from the State. Our valuation anticipates that the 21 percent premium deficiency will be gradually eliminated on a uniform basis over five years from fiscal year 2015 through fiscal year 2019 through increases in retiree premium rates in excess of the underlying assumed health trend. The actuary notes that in the prior valuation at July 1, 2012, the plan incurred a loss of $388 million associated with premium rates lower than anticipated.

For the entire Buck Consultants report, click here. http://www.doa.louisiana.gov/osrap/library/afr%20packetts/2014OGB_OPEBValuationReport.pdf

State Rep. John Bel Edwards (D-Amite) said he had received a copy of the Buck report earlier. “Nothing in this supports Kristy Nichols,” he said.

Edwards has been a vocal critic of the proposed OGB changes, claiming that the increased co-pays and deductibles will create unnecessary hardships on retirees, some of whom are facing co-payments and deductibles higher than their monthly income.

The entire OGB affair has become so confusing that many OGB members were turned away from the first meeting held in Baton Rouge on Monday to explain the changes. Jindal fired about two dozen OGB workers in the last round of firings and Kristy Kreme immediately found it necessary to contract with Ansafone of San Diego, California, and Ocala, Florida which has been trying to hire 100 people in each state to man telephone banks to answer questions about Louisiana’s plan.

Kristy Kreme has already found it necessary to dispatch one OGB employee to San Diego to train Ansafone employees and now $107,000-a-year OGB Chief Operating Officer Bill Guerra is in San Diego conducting training sessions on how to answer questions from OGB members.

DOA, by the way, is supposed to be strapped for cash and there is a statewide freeze on out of state travel but apparently found it necessary to send Guerra to California for a month.

So, let’s recap:

  • Jindal fires most of the OGB employees, including director Tommy Teague, and turns over a perfectly smooth-running agency to Blue Cross/Blue Shield (BCBS) with promises of no changes in benefits or premiums.
  • Less than two years after BCBS takes over, the OGB reserve fund is depleted by one half.
  • The administration fires two dozen more employees because of a lack of work and then enters into a $1.3 million contract with a California company to respond to questions from Louisiana residents.
  • Kristy has to hire two executives from BCBS to help OGB CEO Susan West who apparently is not up to the task. One of those, who ostensibly serves under West, is paid a higher salary than West.
  • Kristy Kreme Nichols attempts to mislead legislators and OGB members by repeatedly saying Obamacare is responsible for rising health costs and the depletion of the OGB reserve fund. No one buys her story.
  • Kristy tells State Rep. John Bel Edwards that the OGB actuary, Buck Consultants, recommended a decrease in premiums but a single paragraph from the Buck Consultants report summary contradicts that claim.
  • Two OGB executives have been sent to California to attempt to teach Ansafone employees how to respond to questions from Louisiana residents.
  • Kristy Kreme ducks out on legislators near the end of the Sept. 25 hearing by the House Appropriations Committee to take her daughter to a One Direction concert in New Orleans where she and her daughter occupy Jindal’s suite at the Smoothie King Arena.
  • A survey of employee job satisfaction conducted in 21 agencies in the Division of Administration reveals widespread dissatisfaction and distrust of the administration. Understandably, the survey has never been released and its contents were not divulged until LouisianaVoice recently obtained a copy.

And now, Jindal is offering foreign policy advice to President Obama with the release of a “policy paper” that calls for more defense spending. http://www.nola.com/politics/index.ssf/2014/10/bobby_jindal_takes_on_obama_fo.html

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You wouldn’t ordinarily expect to see the names of two prominent former congressmen bob to the surface when discussing a health care benefit program for state workers in Louisiana.

But when Office of Group Benefits (OGB) switched to MedImpact, a San Diego company, to provide its prescription drug benefit management services on Jan. 1, the state awarded an 18-month, $350 million contract to a company tied to the 2007 Republican presidential nomination quest of former U.S. House Speaker Newt Gingrich. http://hl-isy.com/Products-and-Services/Pharmacy-Benefit-Evaluator/PBE-Abstracts/2012/MedImpact

And those who listened to testimony last week before the Louisiana House Appropriations Committee learned that the company has proved to be less than satisfactory in handling claims for pharmaceutical benefits.

Gingrich launched the Center for Health Transformation as part of an ambitious consulting and communications conglomerate to let consumers, not health maintenance organizations (HMOs), choose their doctors, medical treatments and hospitals.

While the concept might be a good one on the surface, Gingrich failed to reveal that his idea would greatly benefit drug manufacturers, health insurers and other health care professionals who paid up to $200,000 annually to participate in the center’s operations.

MedImpact was one of those companies who ponied up the big bucks for that privilege.

Sid Wolfe, director of health research for the watchdog group Public Citizen, called Gingrich’s taking money from organizations like MedImpact and then using the weight of his name to advance the interests of those organizations “a massive financial conflict of interest.”

And when Gingrich again flirted with seeking the GOP presidential nomination in 2012, one of the men he chose to co-chair his Florida chairman was Alan Levine, former Secretary of Louisiana Department of Health and Hospitals under Gov. Bobby Jindal (R-Iowa, R-New Hampshire, R-Anywhere but Louisiana) and former Secretary of Health Care Administration for former Florida Gov. Jeb Bush.

Even former Congressman Billy Tauzin of Louisiana has entered the picture as co-chair of Medicine Access and Compliance Coalition (MACC), an assortment of health care providers who advocate lower drug prices through the federal 340B Program. http://www.huffingtonpost.com/2013/08/13/billy-tauzin-drugs_n_3719468.html

Section 340B of the Public Health Service Act requires pharmaceutical manufacturers participating in the Medicaid drug rebate program to provide outpatient drugs at discounted prices to taxpayer-supported health care facilities that provide care for uninsured and low-income people. http://www.aha.org/content/13/fs-340b.pdf

The program allows eligible hospitals and community health centers to reduce pharmaceutical costs to patients.

That would seem to be a radical departure from Tauzin’s previous position as head of the Pharmaceutical Research and Manufacturers of America (PhRMA).

You may remember how in one of his last official acts as Congressman from Louisiana’s 3rd District Tauzin of Chackbay in Lafourche Parish, pushed through that 2003 bill that prohibited the federal government from negotiating pharmaceutical costs for Medicare patients. http://www.nola.com/politics/index.ssf/2013/08/ex_rep_billy_tauzin_smack_in_t.html

Right after that legislative coup, the Democrat-turned-Republican went to work for PhRMA, eventually earning an eye-popping $11.6 million per year. http://www.bloomberg.com/news/2011-11-29/tauzin-s-11-6-million-made-him-highest-paid-health-law-lobbyist.html

No sooner had MedImpact came forward with its presentation on ways in which hospitals may be missing out on opportunities to profit from 340B. In that presentation, MedImpact promised hospitals that it could work “with any wholesaler, pharmacy or claims processing service,” providing hospitals “with the lowest prices, maximum flexibility and revenue.”

Then, last December, OGB sent a letter to its members informing them that MedImpact would begin providing pharmacy benefit management (PBM) on Jan. 1. CCF10032014_0001

Medicare-eligible retirees and their Medicare-eligible dependents would be covered by MedGenerations, a subsidiary of MedImpact, supposedly under that same $350 million contract given that there was no separate contract listed for MedGenerations.

Horror stories about MedImpact and MedGenerations began emerging almost immediately.


Henry Reed, a retired State Fire Marshal’s office employee, testified before the House Appropriations Committee on Sept. 25 that he fought FEMA for hurricane recovery money on behalf of the state but has experienced nothing but frustration with the state’s pharmaceutical management service. A victim of both epilepsy and narcolepsy, Reed said he has to take one medication that costs $2,000 per one-month supply.

His doctor prescribed two pills per day of that medication but “Medimpact informed me they would pay for only one pill per day. Apparently someone sitting at a desk in California knows more about my condition than my doctor.

“I thought I had a good health plan,” Reed said. “I called OGB and they referred me to Medimpact.”

The company simply refused to even approve prescription medications for the son of OGB member Dayne Sherman until he was forced to jump through all types of bureaucratic hoops to get the prescription approved.

So, what is the motivation for Medimpact to arbitrarily cut medications in half or to refuse them outright? Does it get to keep that part of the $350 million that isn’t spent on medications? Does it receive some other incentive to deny or reduce claims? Has it taken lessons from the McKinsey Group, which taught Allstate and State Farm how to delay, deny and defend claims stemming from Hurricane Katrina?

And for that matter, what do MedImpact’s employees think of their employer?

A sampling of postings on a web page that lets employees rate their employers anonymously is not kind to the company:

  • “They can pay you well and give good benefits in exchange for your soul.”
  • “No one is encouraged to think about what they are doing and try to make it better. The leadership team is completely disconnected.”
  • “Great people to work with; lousy leadership.”
  • “Strange, secretive leadership. A lack of clarity, vision and generally poor downward communication.”
  • “Lack direction, unorganized and management sucks.”
  • “Upper management tends to chase bright shiny objects. Burnout is high.”

You can read more here: http://www.glassdoor.com/Reviews/MedImpact-Reviews-E40035.htm

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If anyone—ANYONE—in charge at the Division of Administration (DOA) or the Office of Group Benefits (OGB) knows what they’re doing, please contact us immediately because we have given up all hope that the Jindal administration in its entirety has the first clue.

The following is the latest news release from OGB (through DOA, we’re certain; no one would dare take this responsibility on without the prior blessings of Commissioner of Administration Kristy Kreme Nichols.

But it is ample evidence that these are the people Jimmy Breslin had in mind when he wrote The Gang that Couldn’t Shoot Straight.

After all the planning, all the news releases, all the email blasts, all the expenditure of time and money (we would add talent to the list, but that would generate instant doubt in the minds of our readers), OGB and DOA now suddenly shift gears with this.

Here is the news release (with our comments in boldface type):

The Office of Group Benefits announced Tuesday it would extend the annual enrollment period for its 2015 health plan options through the end of November 2014. The enrollment period will now begin October 1 and last through November 30. The health plan changes are scheduled to begin March 1, 2015 instead of January 1 when the plan year begins.

The enrollment period for supplemental insurance products, including dental, vision and life insurance will be extended through November as well. Those plans will take effect January 1 along with flexible spending plans. Flexible spending accounts allow employees to set aside a portion of their paycheck to pay for qualified expenses before taxes are deducted.

“We take the concerns of our members very seriously (We got our butts handed to us by legislators last week) and want to do everything we can to ensure they have the time and resources necessary to make their plan choice,” said Commissioner of Administration Kristy Nichols. “Shifting our timeline will give people the chance to get accurate information and better understand their options.”

(What she means, of course, is now members will have an extra month to select a method of cutting their own throats.)

In addition to the extended time frame, OGB will allow retirees who are enrolled in an OGB health plan option, either as primary or secondary coverage, to remain in a comparable option without having to re-enroll. Retirees interested in Medicare Advantage plans are still required to enroll by December 7 for the plan year that begins January 1. If no action is taken by the end of the enrollment period, retirees will remain in the option most comparable to their current selection. Active employees who take no action will be enrolled in the Pelican HRA 1000 option, a new choice that offers up to $2,000 in employer funding that offsets out-of-pocket costs. (We hope that will discourage the pitchforks and torches at least until Gov. Jindal can finish his absentee term.)

Several new options with lower premiums and increased employer contributions are available beginning March 1. Members are encouraged to use the additional enrollment time to make the selection that best fits their needs. Most members will remain in their current plan through February 28, unless they choose to make a change. However, members who wish to remain in or select a Vantage plan must make their selection effective January 1.

As health care costs across the country continue to rise (We’re still blaming Obamacare for everything—even the Saints’ poor start), OGB and other employers have had to make changes to benefit offerings in order to continue to pay claims. While OGB maintains a reserve fund that contained more than $370 million in cash at the end of fiscal year 2014, the cost of claims currently outpaces the revenue received through premiums each month (We won’t bring up those premium reductions again; we’ve heard enough about those).

Last week, OGB announced it would begin the process of promulgating the schedule of benefits (but only after Reps. John Bel Edwards and Kenny Havard scalded us in that committee hearing). Sending fiscal and economic impact statements to the Legislative Fiscal Office (LFO) begins the promulgation process that will make OGB’s benefits a part of state law. Once the LFO approves, the rules will be sent to the Office of the State Register, the President of the Senate, the Speaker of the House, and oversight committees. The committees will then send a recommendation to the governor for approval. OGB expects the regular rules to be promulgated by March 1 (We hope legislators don’t remember that we said we couldn’t extend this past the first of the year).

OGB is also issuing emergency rules (Will that be emergency rule number 42 for OGB? We’ve lost count) to publish the formulary and prior authorization changes that took effect in August for active employees and retirees without Medicare. Those changes will take effect in January for retirees with Medicare, in line with the Medicare plan year. Emergency rules have the same effect as promulgation of regular rules, for up to 120 days. They will take effect immediately and continue through the administrative process.

Information on the 2015 plan options is available on OGB’s annual enrollment website at www.annualenrollment.groupbenefits.org<http://www.annualenrollment.groupbenefits.org>. (Or you can totally waste your time by calling Ansafone.) Members are receiving decision guides in the mail that outline each plan in detail. 43 meetings are being held across the state in addition to live webinars for employees and retirees. OGB has also developed a cost calculator tool that allows members to compare plans and out-of-pocket cost side-by-side as well as a one-sheet that compares last year’s plans to the upcoming year’s options. Additionally, customer service hours have been extended to 7 a.m. through 7 p.m. Monday through Saturday.

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LouisianaVoice has not posted a story on last Thursday’s House Appropriations Committee hearings on the Office of Group Benefits because we did not want to do what the mainstream media under the pressure of a deadline must necessarily do: get the story out quickly and without going into a lot of detail—in short, an overview.

This is not a criticism but simply an observation of the nature of the job. Reporters must report the highlights of such lengthy hearings without going into too much detail. Both time and newspaper space (air time for TV news) dictate this.

We are not bound by such constrictions. Nor are we always tied down to deadlines. While the story is important, we would rather review the entire seven hours of testimony and give you the mood of the hearings, both the adversarial sparks and the heart-wrenching emotion of some of those who gave their testimony.

Accordingly, we will offer two installments on the hearing. The first will concentrate on the testimony of state employees and retirees who will be adversely affected if the proposed plans are implemented, with retirees taking the hardest hits. The second installment will relate the exchanges between the administration representatives and members of the legislature, most of whom ignored the warnings of three years ago when the administration first proposed firing about 150 OGB employees and hiring a third party administrator (Blue Cross Blue Shield of Louisiana) and now must deal with the consequences of an angry constituency.

The hearing was one of repeated confrontation between legislators and the administration, and while both sides attempted to adhere to legislative protocol and professionalism, there were times when each side’s contempt for the other surfaced, albeit briefly. But it was sufficient for observers to see that members of the legislature, after six and one-half long years, have finally reached a point that they no longer trusts or have any real patience with the administration of Gov. Bobby Jindal (R-Iowa, R-New Hampshire, R-Anywhere but Louisiana).

In 2011 then-Commissioner of Administration Paul Rainwater said the state did not need to be in the insurance business but now, a short three years later, the administration has embedded itself in the day to day operations of the Office of Group Benefits, even to the point of bringing in two former BCBS executives to assist CEO Susan West in finding her bearings.

The following year, in 2012, Jindal attempted to “reform” state employee pensions. Our best example of what those reforms would have done, a story we’ve told several times now, is the one of the state employee who planned to retire after 30 years. If she never received another raise before her retirement, her pension, under the current retirement plan, would be $39,000 per year. Under Jindal’s plan, her retirement would have been slashed to $6,000 per year—a $33,000 per year hit—with no social security.

The courts ruled his retirement plan unconstitutional, so now he’s coming after health care benefits.

Rainwater’s successor, Kristy Kreme Nichols and West (the third or fourth CEO since the administration fired Tommy Teague—to tell you the truth, we’ve lost track) alternated in dodging questions, fumbling explanations and being generally unsuccessful in providing simple yes or no answers in their sparring with legislators. Division of Administration (DOA) Executive Counsel Liz Murrill, meanwhile, spent much her time sitting behind the witness table texting, seemingly oblivious to heartbreaking testimony of those who are seeing their coverage costs skyrocketing.

She texted, for example, while Janice Font, an art teacher from West Baton Rouge Parish, told the committee that she must take eight medications daily and can barely make the co-payments on her prescription drugs now. “And now you tell me I’ve got to pay double?”

Murrill continued texting as Font said she had to take five months disability “making $200 a month less than my house note” and how she “can’t even call the company to fix my air conditioning.”

The texting continued as Font implored legislators to explain to her what she had done to deserve such treatment. “I am a good teacher. I do a good job. And I’m barely making it. I don’t deserve this. I would like for somebody to come down here and tell me why this is being done to me.”

Henry Reed, a retired State Fire Marshal’s office employee, said he fought FEMA for hurricane recovery money on behalf of the state but has seen little in the way of gratitude on the part of that same state since his retirement. A victim of both epilepsy and narcolepsy, Reed said he has to take one medication that costs $2,000 per one-month supply.

His doctor prescribed two pills per day of that medication. “OGB changed to Medimpact (a San Diego company OGB contracted with in January to pay prescription drug claims) and Medimpact informed me they would pay for only one pill per day. Apparently someone sitting at a desk in California knows more about my condition than my doctor.

“I thought I had a good health plan,” Reed said. “I called OGB and they referred me to Medimpact.”

Roy Clement is retired from the Department of Environmental Quality (DEQ). “I’m being asked to choose between plans that will decrease my benefits while increasing my costs,” he said. “In 2011 Paul Rainwater came before the committee and said OGB funds would not be directed to other programs after privatization. But if you cut premiums, the funds that were not earned (the state’s 75 percent contribution to premiums) go someplace else.

“Tommy Teague was forced out after he had more than $500 million (in the OGB trust fund). Now the fund is going broke.

“Our mandate at DEQ was to help the people of Louisiana,” he said. “Yet we’ve seen an administration plunder every agency for their use.”

Kay Prince, a retired school teacher from Ruston, said she and her husband “chose to work for the state because of good retirement and excellent benefits. Now that we’re older and not in as good health as when we were younger, we need these benefits and we feel we are not being treated as fairly by the state as we treated the state by giving of ourselves everything we had. This is not a good situation. OGB was a wonderful thing and that was what largely influenced us in our decision to remain in Louisiana.”

Vicky Picou said simply, “If you need one of these (proposed) plans, you can’t afford it. Most increases are loaded heavily on those least able to pay.

“It’s not open access if the costs are more than your monthly income. This administration has found deep pockets to subsidize corporations (but) has found nothing but contempt for OGB members who are ill. Under this administration, OGB has seen its CEOs come and go, its workers get terminated and now this administration wants to see its ill and elderly shoved off the OGB plans.”

Neil Carpenter said OGB is not living up to its own philosophy and goals. “Never in my career have I seen half a billion dollars played with so capriciously and arbitrarily,” he said. “I would at least think you would have an actuarial report whereby you could set premiums. From what I’ve seen, they’re based on nothing. There’s no methodology to the madness.” (We will have much more on this in tomorrow’s story.)

“I know the money was not transferred from the reserve fund to the general fund,” he said. “I know that. But if you reduce the amount coming out of the general fund by underfunding premiums that are supposed to be going to the insurance program, you have effectively done the same thing.

“Somehow, we were paying too little to fund the plans and our reserve fund got too big and now we’re broke because we had too much money.”

Ann Curry, a retiree from the Office of Juvenile Justice pointed out that because members from East and West Feliciana parishes are on the Vantage Health plan, they have been going to doctors in Baton Rouge but because of the structure of the new proposals, those members will not be eligible for the less expensive plan because the Baton Rouge doctors will not be in that network. Consequently, they would have to opt for the more expensive plan.

Mary-Patricia Wray, legislative director for the Louisiana Federation of Teachers, said the administration’s idea of “right-sizing” the OGB plan really meant right-sizing for the administration. “The right-sizing, according to this plan, means it will be suffered by state workers and teachers only. The costs to the state stay the same. Deductibles, co-pays, out-of-network costs will be going up—way, way up. Whenever the state’s position in right-sized, it comes out on top. The last time it right-sized, it saved $95 million by decreasing premiums. That decision led to financial problems and now the state is being ‘same-sized,’ not right-sized. Members of OGB will bear the burden of that poor decision.”

Frank Jobert, executive director of the Louisiana Retired Employees Association said the administration created the crisis. “This entire conversation today would not be necessary had we not reduced premiums and created the problem that exists today that you’re trying to solve on the backs of employees and retirees.”

Jobert said he had been told some legislators do not want to get involved in the OGB discussion “because they’ll be blamed. But if you don’t get involved, you’re going to share the blame. You’re going to leave some people out in the cold.

“This program was fine,” he said. “It was functioning; we were happy with the premiums and nobody was complaining. Now we’re doing everything in a completely different manner, adding confusion, giving programs new names and no one is happy. We need your help,” he told the legislators. “It’s your job. We elected you to do this for us.”

Tommy Teague, who was fired as executive director of OGB on April 15, 2011, when he failed to embrace Jindal’s privatization plan, was one of the last non-legislator to testify. His firing followed that of his wife Melody six months earlier for testifying before Jindal’s streamlining committee. And though she appealed and got her job back, the firing of the two gave birth to the often used term “teagued” as synonymous with being fired or demoted by Jindal.

Teague now serves as general counsel and Vice President of Provider Relations for the newly formed Louisiana Health Cooperative.

“There was never a rule change undertaken at OGB without going through the Administrative Procedures Act (APA),” he said. “We followed the APA every time there was a change in a benefit plan. We allowed for complete oversight of all changes as the APA called for.”

Legislators, as we will see in tomorrow’s installment, were highly critical of the administration’s reluctance to comply with the APA.

“I do have a business motive for being here,” Teague admitted. “Louisiana Health Cooperative is a new start-up health maintenance organization (HMO).

“OGB is required to seek out any Louisiana HMOs that would like to participate in the state employee health coverage during open enrollment. We asked OGB for an opportunity and they refused to let us participate even though we believe the law requires the solicitation process to include us. We offer a plan very similar to the current HMO plan and could save the state millions of dollars.

“We would encourage the oversight process and that you push back the open enrollment (now scheduled for Oct. 1—Oct. 31) and that we be allowed to participate and offer our plan through the open enrollment process.”

Then, deliberately and emphatically, Teague said, “When I was fired (from OGB) in 2011, the fund balance was $506 million and the Office of Group Benefits was running like a top.”

And Liz Murrill texted.

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On Tuesday, September 23, our school-aged son was given a commonly prescribed medication by his physician. My wife attempted to get the pharmacy to fill it. We were shocked and horrified to find that it was rejected by our health insurance: Office of Group Benefits HMO Plan through BlueCross, a health insurance plan for Louisiana public employees.

For almost 16 years I have been a member of OGB, and my wife, a teacher, has been a member for 25 years. This is the second rejection we have received this year through MedImpact. Rejecting my medicine is one thing, but rejecting our son’s is another. We have never seen anything like this in our years with OGB.

You will recall that OGB was privatized under Gov. Bobby Jindal, and nearly all of the $500,000,000 trust fund has been stolen. Soon, all money dedicated to funding state workers’ insurance will be gone. The money was pilfered by Jindal in an effort to fill holes in his economically disastrous state budget. But this will mean 230,000 Louisiana citizens are about to lose all semblances of health coverage on January 1.

Earlier on Tuesday, the former Health and Hospitals head, Bruce Greenstein, was indicted, and the state attorney general declared the new state health insurance changes illegal through an opinion solicited by Rep. John Bel Edwards of Amite. I thought this might stop the train wreck.

But later in the day I had to fight tooth and nail to get our child’s medicine. I had to contact state representatives and the media. We were finally able to get the meds filled on Friday afternoon. I wasn’t looking for a freebie. We pay hundreds of dollars a month for health insurance, have co-pays for everything, and we paid $55 for the prescription. We just wanted the doctor-prescribed medication. Not the insurance-mandated meds.

Most employees and retirees will not be so lucky. Louisiana state employees and retirees need to understand one fact. If all of the proposed OGB changes go through as Gov. Jindal plans, they are effectively uninsured. Health coverage is over, and it will not be coming back.

Sure, Kristy Nichols, Jindal’s spokesperson, says the OGB trust fund was too big (Insanity!), that they are “right-sizing” the insurance plans (Destroying them!), and they’re now offering better options called Pelican HRA 1000, Pelican HSA 775, Magnolia Local, and other names worthy of George Orwell’s 1984. According to Nichols, the new plans will be pure utopia. But when an OGB member gets a letter from MedImpact of San Diego, California, a cold memo rejecting a medication prescribed by a doctor here in Louisiana, let’s call it what it is: a “death panel” letter.

As one person put it, “Bobbycare” is health care without any care at all. How true.

While our governor flits from Iowa to New Hampshire playing presidential candidate, a delusional quest to anyone but himself, Louisiana goes the way of Rome on fire, burning, burning, burning. Jindal is like a hummingbird on crystal meth. The wings are moving at a blinding pace, but the overall flight is completely doomed.

I have three questions about the OGB privatization and the missing half billion dollars: Who will go to prison for stealing state funds through a scheme worthy of a bank heist? Will the FBI investigate the theft of public money? And will the legislators stop the train wreck?

Let’s all hope and pray that the FBI, the courts, or the Louisiana Legislature will prevent Jindal from destroying one more area of Louisiana that worked before he came into office: the Office of Group Benefits.


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