Listening to Commissioner of Administration Kristy Kreme Nichols’ responses to questions during last Thursday’s House Appropriations Committee hearing over changes to the state Office of Group Benefits (OGB) health plans, one word kept coming to mine: bromides.
Bromide is defined by Merriam-Webster as “a statement that is intended to make people feel happier or calmer but (which) is not original or effective,” and by Wikipedia as “a phrase or platitude that, having been employed excessively, suggests insincerity or a lack of originality in the speaker.”
No matter which definition one might choose, that is precisely what legislators and members of the audience were treated to during the seven-hour hearing at the State Capitol.
Keep in mind as you read this that subsequent to the hearing last Thursday, the administration of Gov. Bobby Jindal (R-Iowa, R-New Hampshire, R-Anywhere but Louisiana) retreated from its plans of the gang rape of 230,000 state employees, retirees and dependents so that the administration can follow the law for a change and proceed through the legal process of obtaining approval of the proposed benefit changes for OGB members. https://louisianavoice.com/2014/09/30/in-need-of-aloe-vera-after-being-burned-by-appropriations-committee-last-week-ogb-announces-enrollment-extension/
Katrina Jackson (D-Monroe), for example, sparred with Nichols on the issue of the $1.3 million contract with Ansafone, Inc. of San Diego and Ocala, Florida to field phone calls from OGB members. “Where is the project work plan?” Jackson asked. “No one at OGB knew what it was when I called. No one on the committee has received any project work plan. We have a $1.3 million contract for phone service. Is this something that Blue Cross/Blue Shield (BCBS) should be doing?”
“We had no other choice but to ramp up our customer service for open enrollment,” Nichols said.
Jackson again asked if fielding questions from members should be something BCBS should be doing to which Nichols responded, “OGB has always retained a customer service component.”
Jackson said legislators were told three years ago that privatization of OGB “would be helpful to members, not harmful. We fixed something that was not broken and now it’s broken. We were doing pretty good but then for some reason we offered the business to BCBS, everyone shifts to that and our utilization costs go up.”
Jackson finally got Nichols to concede that utilization is a major issue. “Vendors have to 100 percent accountable for managing utilization with us. To the extent that the request for proposals (RFP) and current contract did not explicitly mandate that, we need to in the future.”
We’re glad we could clear that up for you.
Kenny Havard (R-Jackson) asked Nichols why the Administrative Procedures Act, which lays out a step by step procedure for the adoption of rule changes. For a complete list of APA requirements, click here: apa
“We are,” Nichols said.
“You’re doing that now,” Havard countered. “But you didn’t before. If you’d done it before, we wouldn’t be here now. Who decides what laws we have to follow and which ones we do not have to follow in this?”
“The legislature sets laws and we try to follow,” Nichols replied.
“Everything we do lately ends up in court and that’s exactly where this is heading,” Havard shot back. “We’ve created a problem that we’ve put on the backs of state workers. We have people making $500 a month and you’re about to raise their insurance (costs) and somebody needs to answer for it because we’ve created a problem and blaming it on somebody else. I don’t support Obamacare but I also don’t support Jindalcare.
“We lowered premiums so the state would not have to put up its share and now the fund balance is dwindling,” he said. “I just want to know who made the decision that we didn’t have to follow the APA.”
“We are following the APA,” Nichols continued to insist. In our opinion, the plan of benefits does not have to be promulgated because it’s in the OGB authority.”
State Sen. Ed Murray (D-New Orleans) attempted to question Nichols but soon grew frustrated at her evasiveness and gave way to Rep. Greg Cormer (R-Slidell) who asked but did not receive a definitive answer: Did an actuary give the opinion on the rate decrease of 7 percent? Cormer told OGB CEO Susan West, “If you were a private insurer, the Department of Insurance would have already taken you over” because of the agency’s mismanagement.
Jack Montoucet (D-Crowley) asked Nichols, “Where would OGB be today had we not made all the changes, if we’d left them alone and let them do their job? To me, it wasn’t broken. I never got a call in six years (prior to privatization) complaining about OGB. Today, I gotta tell you, Jesus Christ, I’m getting phone calls every day and this (new plan) hasn’t even been implemented. That’s scary.”
Nichols, as she did most of the day, stammered and fumbled for an answer. “All public employee health plans are experiencing the same thing,” she finally said, but then said that the cost increases “could have been prevented if we’d structured the HMO correctly in the beginning.”
Joe Harrison (R-Gray) went further than the others in calling for a special legislative session to deal with the OGB crisis and noted that there were no problems with the agency during the tenure of Tommy Teague, who was fired as CEO on April 15, 2011.
“Mr. Teague had a solvent plan and I’ve yet to hear any in the administration tell me why we moved away from that plan,” Harrison said.
“I would ask that we have a special session on this,” he said. We have more than 200,000 lives we are adversely affecting. There are other options to this. Many in the insurance and health care industry have looked at this and (have) said there are better ways to go.”
The hardest questions, however, came from Rep. John Bel Edwards (D-Amite). Following up on a question asked earlier by Rep. Greg Cromer (R-Slidell), Edwards asked if the recommendations for premium decreases three consecutive years were made by an actuary.
“I was not with OGB then,” West said. “I don’t have that information with me…”
“It’s been three hours since that question first came up,” Edwards said.
“I don’t have that information with me,” West repeated.
“It’s been three hours since that was asked,” Edwards said again. “That’s three hours in which those reports could have been brought over here. Who made the decision to reduce premiums by 9 percent total in fiscal years 2013 and 2014?”
“Ultimately, the administration,” Nichols said.
“The OGB director?”
“I wasn’t at DOA in fiscal year ’13,” Nichols said. “I don’t know where the recommendation came from.
When Edwards elicited testimony from Nichols and West that the OGB policy board had not met in more than a year even as the OGB fund balance was dwindling by $16 million per month, he asked, “Was there a lack of a quorum because there weren’t enough members appointed to the board (by the governor) or that they weren’t showing up for meetings?”
“A combination of both,” West said.
“So we have a situation where (the decision was made) to reduce premiums by 2.25 percent in 2012 which drained the fund balance by 3 percent knowing costs were going up 6 percent, and an additional reduction of over 7 percent the next year and an additional reduction of almost 2 percent the following year all the while with costs of health care going up and we were surprised that the fund balance went down?
“This is a self-manufactured crisis that you are now saying is an emergency because we had a fund balance that was healthy,” Edwards said. “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. In fact, I would not that not a single OGB member came to testify today who support any of those plans—not a single one of them.”
Edwards if there was to be discussion of stability for OGB, “we can’t leave it in the hands of whoever’s been running it for the last two years…”
He then asked Nichols when the decision was made to follow the rule of promulgation as mandated in the APA.
“The general counsel advice to OGB,” Nichols said, “was a plan of benefit changes should not be required to be promulgated…”
DOA general counsel Liz Murrill stopped texting long enough to interject, “We had the conversation at the beginning of September.”
“When was the decision made?” Edwards repeated.
“At the beginning of September,” Murrill said.
“The (OGB policy) board looked at what you wanted to do in July so you knew what you wanted to do by July 30. If you had started the rule promulgation process by August 30, you could get through the entire process before January 1. You didn’t do that.”
Nichols, in a weak attempt to defend the emergency rule procedure in lieu of promulgation, asked, “Why was OGB allowed to implement 41 emergency rules in the past?”
“I suspect because nobody challenged it,” Edwards shot back. “Typically, you don’t follow the law unless you get challenged and that’s the real precedence that you’re following.”
Saying a Pew Survey shows that Louisiana is the third stingiest state in the nation in providing health coverage for public employees, Edwards said there is a “tremendous disconnect between saying we had an inflated reserve fund that it needs to be right-sized and today saying we have an emergency because the fund balance is not enough and it’s on its way (from a high of $520 million) to $8 million.”
He then again asked the question that no one had answered to that point. “In fiscal year 2012 there was a 3 percent erosion of the fund balance. 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,” Nichols said.
“If you don’t have an emergency, then what you’re going to start on January 1 is invalid and you’re causing a bigger problem than if you simply go through the ordinary rule making process,” Edwards said. “Anyone who’s adversely impacted by having to pay a higher deductible or higher co-pays by an invalid emergency rule has a right to have that money returned to them.
“The safest thing to do if you are really worried about the taxpayers of the state of Louisiana is to give very serious thought to stopping the emergency rule making process, go forward with the ordinary rule making process and have whatever plans survive that process implemented in a year that doesn’t start until they (the rules) become final.
“Public meeting notices, meeting requirements, and oversight by the legislature are all very, very important. We had people today saying this was the first opportunity that they had to come and voice their objections. That’s an important part of this whole process.”
Louisiana Voice 
Implementing the plan has been postponed, but neither legislators nor plan members should let down their guard, because, no mistake about it, the Jindal administration will move forward with their cockamamie plan if they are allowed to get away with it.
You are so right, June, now is not the time to stop being persistent and vocal about this because as it is, they are only extending the time of the Open Enrollment. What they need to do is SCRAP every single, ridiculously outrageous plan conjured up by their way-too-expensive consultant & whoever else had his or her finger in that pie and start from scratch. I don’t know anything about insurance, but there are a lot of people who do who say there are much more affordable and satisfactory ways to handle this. I sound like a broken record, but WHY is he being allowed to get by with this and every other illegal thing he and his flunkies have done and are doing?
My. Blood. Is. Boiling.
Oh, Ben, mine boiled and evaporated a long time ago. This whole fiasco has affected my health detrimentally (and gosh, we all know I won’t be able to pay a doctor or buy medicine!!), and I sometimes think that I have to be dreaming because reality couldn’t possibly be this bad!
Absolutely do NOT let up the pressure on the Legislators ! I predict near riots at the OGB meetings in the coming weeks. We have no choice and nothing to lose by demonstrating our total outrage at this entire fiasco. Keep after them Tom! Go get ’em!
If the National Republican Party is dumb enough to consider BJ on a national ticket, then they will deserve to lose; and I am a registered “R”.
Tom, fellow commenters, someone!!!
Please tell state employees specifically what we need to collectively to stop/ fix this before it happens. How do we stop this through the administrative procedures act? Will our protest, by law, stop it or just put our feelings on the record? Can’t acting governor Krispy Cream still do whatever she pleases.
Fellow state employees, WE need to DO something, ACT now. No one is holding them legally accountable. We’re almost a quarter of a million votes strong, and throw in our families and we have the numbers to hold the legislators responsible if they fail to act, and are just given us lip service.
This isn’t just on our backs, it’s breaking our backs.
Please someone give us ideas and suggestions. If we don’t use them or act on our behalf they governor Krispy Cream Nichols wins again!
If the APA is followed without an emergency rule, jindal has the final say. With an emergency rule, legislative oversight has the final say.
Click to access apa.pdf
This will be forced down our throats. Enrollment and implementation postponement gives the administration just enough time to follow the APA without issuing an emergency rule.
I notice an attempt was made during testimony to attribute the increased claims costs to increased utilization. Why would utilization have increased dramatically? As I asked earlier, are the benefits of the new, improved, privatized program richer than those being offered under the old plan? If they are, I haven’t noticed. Has anybody noticed anything that would make you use your insurance benefits more in the last few years since privatization? I’m serious.
I realize I, like K777us, am sounding like a broken record, zapped data file, or stuttering CD, but where is the real explanation for why the cost of claims increased? Were more claims filed, and, if so, why? Did the administrative costs of the claims process, per se, go up? if so, why? According to data I trust, health care inflation has gone DOWN over the last couple of years to a current rate just above 2%, not the 6% reflected in the testimony, so how much did the actual per claim costs for the same services go up under privatization? If it was 6%. why?
Anybody?
These questions are key, and some of which I asked early on. If utilization has increased, show us the hard data. Same for the claimed 6% inflation in costs, which is does not follow the current national data trend. I’m pretty sure administrative costs have increased because BCBS has to turn a profit, whereas the original OGB didn’t. Again, a comparison of admin. costs from the OGB-run system to the privatized system is essential to this debate.
If legislators are serious, they would demand that an outside auditor (as in not hired or beholden to the current administration – yes, that would probably be like finding a pink-haired unicorn) be brought in to examine the data and evidence while Nichols, West, et al are banned from the premises. The administration’s credibility is shot, so having multiple hearings and sessions with them fumbling to remember which lie to use isn’t especially helpful.
The only good thing – with over 230K people affected by this, almost everyone in the state knows someone who will be impacted by these changes. Use this as your pulpit to remind your friends, neighbors, etc. how who they vote for makes a difference. Our state can’t handle another administration like this one, so choose wisely next time.
AND, if legislators haven’t gotten the message yet, they better be wary of their next election, too.
She was simply “dumbing things down” for us common folk who are otherwise happy go lucky as a puppies after a successful bowel movement.
Stephen, All of your questions are valid and Louisiana citizens have a right to the answers. Who are the people elected to be the voice of our state citizens?
The Legislators. See legis.gov and contact every state senator under Senate and every house member under House. Tell them, We the people deserve and demand answers!! Don’t stop calling or emailing. Now for those legislators who were absent, they need to be contacted twice as frequent.
I would like to know why BCBS is the only vendor. In the past we had several different vendors to choose from during open enrollment. Does anybody know if we can demand other vendors to add competition and possibly get lower rates?
Where is Piyush? This is his monkey.
Why would anyone expect Jindal to stand by his inner circle when they’re in trouble? Have a little respect. Jindal’s busy running for president. Besides, his mere presence at the hearings would have besmirched his stellar reputation.
This is privatization. Isn’t this supposed to be better managed than what state employees were doing?
A retired state employee as others who are still employed and have been ridiculed and called incompetent!!
If we weren’t all going to be affected by this fiasco – I would laughing.
This is an absolute shame. Unfortunately, several of the members of the legislature who are pressing the DOA for accountability, have ulterior motives themselves. Rep Cromer is involved with a newly formed HMO and I’m bothered by the fact that he has not recused himself from the hearings. Would he be as “excited” about this in the absence of his involvement with the new company; LA Health Cooperative? Pardon me for my lack of trust as I do not know anything about the man; I just can’t help but wonder. The legislature appears to turn its back on “public trust” unless they are forced to pay attention. Leadership is supposed to represent the “cream of the crop”, but really, here in L:A, its the “cream of the crap”!
Disgusted!
I don’t know what my future will be. I’m an education support person who makes under $16,000 a year. With all my insurances (health, life, etc.) I clear less than $400 a month. My car fuel costs around $50 a week to travel to and from school. With the cost of living, it cost me more money to work than stay home. However, I had cancer, and I trusted my insurance. Now what am I going to do? It’s a slap in the face for a hard worker who cares for our future generations.
slopez, contact every member of the legislature, and tell your story. Repeatedly ask for updates from your own senator and representative.
I am sorry for what you are going through; this is a good example of hypocrisy. Jindal has constantly made the claim that Obamacare was bad bc it encouraged people to not work bc of cost; is there any difference here? Jindalcare is the result of a desperate presidential run.
DOA general counsel Liz Murrill, you mentioned stopped texting long enough to make comment. What firm does she represent and it seems like, even though she is protecting Jindal’s interest on our tax dollars she could at least put the damn phone down. That is unless she was keeping the receiver informed via messages and receiving responses to those texts on how to respond to questions? OGB had counsel, why wasn’t the public represented? What a flipping farce this is.
After reading about Cassidy’s involvement with this trash via Buck he can kiss my vote good by. I was going to be anatomically descriptive but I chose the high ground.
She does not work for a firm. She is a full-time employee as General Counsel for the Division of Administration at $165,000 per year.
Except for my Republican Rep. Kenny Havard, you can forget about talking to any Republican. They actually believe Jindal and have fallen for the scheme to privitize everything and it is simply a propaganda war for the rich folks. It is human nature to be greedy and none of us like to admit our mistakes. This propaganda war has gotten out of hand. The Jindalites are numbers people, remember Jindal counting sandbags building his representation as a leader. He is a cold, arrogant little prick and has concentrated power with little regard to our Constitution. He wins every time because he plays to our fears, ignorance and prejudice. “Learning” overcomes these necessary traits and we must keep on learning. You know what happens when we stop learning? You become a Republican, they know everything. ron thompson