Even as the Jindal administration was announcing that it was capitulating to the desires of the attorney general and state legislators to delay implementation of new proposed health coverage plans for state employees and retirees, the Office of Group Benefits (OGB) was quietly issuing a request for proposals (RFP) for actuarial services beginning Jan. 1, 2015.
Greg Cromer (R-Slidell) and John Bel Edwards (D-Amite) asked several times during the hearing the identity of the actuary who recommended three consecutive years of premium reductions in the face of rising health care costs and it wasn’t until the fourth time the question was asked that an answer was forthcoming.
“In fiscal year 2012 there was a 3 percent erosion of the fund balance,” Edwards said. “Yet, 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. What actuary told you those reductions were sound?”
“Buck Consulting recommended a 2.25 decrease for calendar 2012,” Commissioner of Administration Kristy Nichols said.
Edwards then asked if Buck Consulting was still under contract to the state.
“That contract is being bid,” Nichols said.
“I would hope so,” Edwards responded.
State records indicate Buck had a $2.1 million contract with OGB to provide actuary and consulting services. That contract ran from Dec. 1, 2009 through Jan. 1, 2012. Additionally, Buck had another $600,000 contract from June 1, 2011, to June 1, 2013, “to assist in advising the Division of Administration with regard to public retirement systems and insurance benefits for public employees, actuarial services” at $250 per hour and per diem payments of $165.
Buck Consultants is a subsidiary of Affiliated Computer Services which in turn was purchased by Xerox in 2009. Jan Cassidy, sister-in-law of 6th District Congressman and U.S. Senate candidate Dr. Bill Cassidy, worked as Regional Vice President of Business Development for ACS and Xerox for nearly four and one-half years before going to work for DOA in December of 2012 as Assistant Commissioner in Procurement and Technology at a salary of $150,000 per year. A search of state contract records in March of 2013 by LouisianaVoice turned up four contracts with ACS totaling $45.55 million.
ACS contributed $10,000 to the campaign of Gov. Bobby Jindal (R-Iowa, R-New Hampshire and R-Anywhere but Louisiana) in 2003 ($5,000), 2008 ($4,000), and 2009 ($1,000), Jindal’s campaign records show.
LouisianaVoice, in March of 2013, noted several contracts between ACS and other states, cities, and even the federal government which drew sharp criticism over problems experienced by the company as well as questionable contracts in Texas and Alabama.
But ACS wasn’t the only entity in that organization with problems. Buck Consultants was sued by Providence, Rhode Island in 2013 because, the city claimed, Buck miscalculated $700,000 per year in savings the city anticipated through pension reform. Instead, Mayor Angel Taveras said, the cost to the city was expected to be $10.8 million over the next 28 years.
In California, Buck Consultants was also accused of making several mistakes in its actuary for the Mendocino County retirement system, prompting the county to cancel its contract with the firm in March of 2011. Buck Consultants paid the county nearly $600,000 as a settlement of its dispute in September of that same year. http://www.ukiahdailyjournal.com/ci_17656902
http://www.ukiahdailyjournal.com/ci_18951388
In a case that should sound familiar to OGB members who have been following events since the privatization of the agency, retirees in Stanislaus County, California, in 2009 sued the county retirement board over its decision to shift $60 million in reserves to ease the county’s pension obligations for fiscal year 2009-10. http://www.modbee.com/2009/12/24/984878/retirees-challenge-stancera-over.html
And now OGB “is seeking proposals from actuarial and consulting (actuary) providers for a contract that will allow for benefit design, rate development, RFP scoring, and other analytical and financial support activities for the state health insurance plan,” the RFP says.
The actuary chosen for the contract “will provide methods for, and calculation of, health plan premiums for OGB health plans and other support services.”
So while Kristy Kreme continues to insist that the current plans for OGB do not call for increased premiums, only higher co-pays and deductibles, it’s interesting to note that the contract being sought by OGB certainly leaves the door open for premium adjustments down the road and it isn’t difficult to guess which way those adjustments will go.
The RFP says that OGB projects medical plan expenditures of almost $1.284 billion in fiscal year 2015, which begins next June 1. Of that amount $56.9 million will be in administrative costs, the RFP says, adding that OGB will require “ongoing consulting and assistance with benefit development, rate setting, risk adjustment determinations, financial analysis, analysis of claims and encounters, evaluation of expenditures, budget projections, trend calculations, causes and discovery of trend, evaluation of multiple benefit options, and financial and other reporting requirements as may be necessary to administer” the health plan.
Should Buck Consultants submit a proposal and should it be the low bidder, someone other than Kristy Nichols might wish to talk to the folks in Providence, R.I., Mendocino or Stanislaus counties in California to do a little vetting before a contract is awarded.
This consultant-happy administration has made a horrible mess of things with OGB since 2011. There’s no need to continue down that same road of bad decisions.
Countless corporate consultant crooks (including Cassidy) are in cahoots crouching behind Kristy while a Koch-controlled corrupt Congressman counts the clueless’s votes. To quote: “OFF WITH THEIR HEADS!” Take me to the revolution.
REVOLUTION! Given that half of the victims of this Administration are getting killed off anyway, and the other half will be chased out of state, REVOLUTION! There’s nothing more to lose. (I agree Alicia)
What a tangled web around this entire mess! Great job, Louisiana Voice, in continuing to shed light on all the players in this madness and all the players.
Everyone should note where their representatives are on this absolute botched tragedy.
Is yours participating and trying to protect OGB and its members?
Mine, Rep. Eric Ponti, is not, and believe me, I will remember.
He has hundreds if not thousands of OGB members, dependents and families in his district.
And, he is silent and absent!
As someone said yesterday, he is NOT INTERESTED.
Is your representative interested and involved on your behalf????
These corporate consulting parasites have just about sucked Louisiana dry.
Here’s another in my series of questions that seem obvious to me, but apparently not to anybody in a position to do something:
Now that all these plans are private plans, why the hell do we (the State of Louisiana) need to hire an actuary to assess and develop premiums for them?
Are we to assume the companies underwriting and running the plans don’t have actuaries? How do Blue Cross Blue Shield and Vantage come up with the premiums they charge their non-OGB participants? Do they fly by the seat of their pants and hope they make a profit? Obviously not. Do they simply agree to accept whatever premiums the State of Louisiana agrees to pay? How is that even within the realm of believability? How is any of this?
Who better to pass the blame to than a consultant with a bad rep from other states? I bet if you looked in close enough you would find where Buck was told what was an acceptable figure for them to get paid!
Once again, I see a major discrepancy being overlooked. While I do not support the hiring of Buck Consultants or any of their recommendations, they only recommended a decrease in premiums of a little over 2%. However, SOMEONE, in their infinite wisdom, decided to implement nearly 9% in decreases. Who is that SOMEONE??? Off with that person’s head, I say!!
Stephen Winham, I totally agree. Why are we paying million$ to Vantage and BCBS yet still having to pay million$ more to hire an actuary to do what they should already be doing?
Personally, I think the ultimate irony would be Tommy Teague submitting a proposal that will ultimately underbid anyone else. Then, he could end up making probably twice the money, or more, than he was making as a State employee doing the very same job. That might make up for his loss in salary and retirement benefits from being fired!
On the topic of legislators’ positions, I do need to support my representative, Rep. Havard, a REPUBLICAN!!! He is standing strong in support of State employees/retirees. I was even told at the meeting that he had actually contacted some concerned persons who were not even in his district to discuss this atrocity.
On the other hand, my senator, Senator Ward,another REPUBLICAN, was NOT present at the meeting and has remained silent and hidden during this debacle. Guess who will be getting my vote next year, and who will not?
I have the same representative and senator and my plans for the next election mirror yours. Thanks.
I wrote to Rep. Havard, though I am not is his district. because I read his comments in the Advocate about Obamacare. I did not receive a response.
“Dear Rep. Havard,
“If you believe the spin of the Jindal administration, that Obamacare has anything to do with the mess in OGB, then you will never get to the root of the problem to help find a solution. OGB was running just fine until Jindal and his circle began firing OGB employees and hiring outside contractors to do the job. The contractors were supposed to save the state money, and their way of saving money was on the backs of state employees and retirees.
“I am not in your district, but my husband is a retired state employee, and I saw your comment in the Advocate newspaper.
“Thank you for your attention. “
June Butler, I am sure he appreciated your comments. He has the district with the largest concentration of State employees of any district. He has 2 prisons, countless mental health hospitals and a veterans’ home, not to mention other State offices within his district. He is probably overwhelmed with screaming State employees + retirees right now, so please don’t take it personally if he did not reply to you just yet.
June, I agree with Anonymous Retiree. At the Appropriations Committee Mtg., he, John Bel Edwards, Jack Montoucet, Katrina Jackson, Greg Cromer & a few others really slammed it to Nichols & OGB. I’m not a constituent of any of these legislators, but Rep. Havard, Rep. Howard & Rep. John Bel Edwards have always responded to anything and everything I’ve ever written to the Legislature about. I’m sure he’s just swamped right now with calls and letters.
Thank you for your excellent investigating and reporting, Tom. What would we do without you? The big media are of very little help in uncovering the dirty secrets hidden away in the depths of the Jindal maladministration. The plot thickens, as we are reminded of the Cassidy connection.
I wish the Feds would come in and put Jindal under half the scrutiny that they put Gov. Edwards under years ago.
Does anybody know anything about Vantage Health Care and the kind of service it provides? The reason I ask is because I had to leave the meeting early but learned that Tommy Teague stated that the HMO he is now connected with wanted to bid but were not allowed to participate. And Vantage is the only one (I think) other than BCBS who are participating. I have no doubt Vantage was let in because Jindal & somebody connected with Vantage are probably in cahoots. The extension of time did nothing if the proposed plans are not changed, and if they aren’t, we are SUNK because none are affordable for most of us. But if worst case scenario happens, can anybody tell me about the Vantage Health System and the kind of service it provides?
I’m sure you already read Tom’s latest post on Vantage:
https://louisianavoice.com/2014/09/25/2010-rfp-for-ogb-contract-for-ne-louisiana-may-have-been-crafted-to-give-advantage-to-favored-vendor-over-competitors/
All I know about them is my doctors are not participants in their HMO so be sure to check out their providers directory if you are considering them. Retirees without Medicare who want to keep their current doctors may find themselves with little choice other than the default low premium, low coverage HRA plan.
Fortunately, I have Medicare and my doctors participate in People’s Health – the way I am planning to go unless something happens.
Thank you very much, Stephen. I don’t know how I overlooked Tom’s article on them, but my life is very hectic most of the time, and fighting this battle with OGB & Jindal has really taken the wind out of my sails. Unfortunately for me, I don’t have Medicare, but their default policy isn’t one I would choose. I’m still being naive and am surely in denial, but I’m hoping for some last minute miracle that all those outrageous plans will be scrapped and we’ll be offered some affordable, decent health care. Is that too much to hope for at this point??
They have provided services in NE LA for quite a while, but this is the first year that they have expanded to statewide.
Review their “offerings” very carefully. They have a very narrow list of “Tier I” providers with minimal co-pays to see those providers. However, their “Tier II” list of providers is more expansive AND expensive. “Tier II” providers will cost you $35/primary co-pays and $45/specialist co-pays. I looked closely at them because they are also offering vision and dental care, but their list of providers in south/southeast LA is VERY minimal, and most of my doctors are not on their list..
The premiums for the Magnolia Local Plus (BCBS) are about the same as Vantage, and their list of providers is pretty expansive. It is the closest thing to the current HMO plan.
Thanks very much, Anonymous Retiree. I came to the same conclusion as you after looking into it. Appreciate your input.
I believe if one fourth of the money spent on outside contractors that the State retains would be dismissed and let state employees do the job that this would get the state, i.e., OGB completely out of debt and all state employees, retirees and present, could get increases in their income to pay for insurance. Seems like the State is giving incentives out more than income coming in. This needs to stop and let new businesses obtain loans from the federal government as we had to do when we started out. We made it and the state needs to welcome more business at the expense of the business not the expense of the people of Louisiana. If the product is good enough it will make money and grow and more people would be working and paying taxes and contributing to the growth of the state.
From day one Jindal pushed legislation that deliberately reduced tax revenue so none would be available to fund state programs. It fits the crazy notion that Govt is a 4 letter word. Then (having promised to keep “our best and brightest” in state) he raided multiple funds, destroyed programs, sold off state assets for pennies on the dollar and created countless high-salaried positions for hordes of carpetbaggers and trusted minions.
From de-taxing big business (which won’t even pay billions in damages, thanks to Piyush) to huge tax credits for his affluent friends, J-Boy has sucked us dry. Our Best and Brightest are leaving in droves. And if you think any elected Republican in LA is worth keeping you may want first to check how he voted on Jindal’s pet bills. Third-world Jindal could never have destroyed all he has without the uncaring, corrupt support of the R-controlled legislature.
Unfortunately, even when we rid ourselves of Piyush and even IF LA fools don’t replace him with Sinner Vitter, we will never overcome P’s raid on our state AND destruction of crucial agencies. OFF WITH THEIR HEADS!
I agree!!
[…] the administration, OGB members were still going to see premium reductions through 2012. Instead, new consultants hired by the Jindal Admin now say the OGB system’s privatization and rate increases (with some out-of-pocket expenses […]