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:
- 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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