What happens when a former governor’s privatization plan goes terribly wrong?
Okay, perhaps we need to be a little more specific, given so many things have gone so terribly wrong with so many of Bobby Jindal’s half-baked privatization schemes.
In the case of the Office of Group Benefits, the answer is plenty and none of it is good.
As chronicled in several posts, LouisianaVoice told of then-Commissioner Paul Rainwater first saying OGB would be sold, then saying it would not be sold, and in the end, its operations were turned over to Blue Cross/Blue Shield of Louisiana, throwing about 150 OGB employees to the curb.
Tommy Teague, who had taken over the debt-ridden agency and transformed it into a smooth-running outfit which managed to build a $500 million fund balance from which it paid claims promptly, giving state employees and retirees and their dependents little cause for concern, is a case in point.
For his trouble, he was fired (teagued) because he didn’t fall immediately in line with Jindal’s Milton Friedman-inspired doctrine of privatization. Teague’s successor lasted barely six weeks before he threw in the towel and departed for another state.
Along the way, the administration went against the advice of its own expensive consulting firm and lowered premiums to OGB members. That looked good for the covered employees but what the move really accomplished was the state’s being obligated for a lowing matching amount. The state pays 75 percent of the employee premium and by lowering the premium, it simultaneously reduced the state’s obligation and the money saved was used to patch one of those gaping holes that appeared in the state budget every single year of the Jindal administration. It was, in short, a shell game run by a con artist with one eye on the big score—the presidency.
Of course, that also had the effect of creating a heavy drain on that $500 million reserve fund, since premiums could no longer keep up with the cost of claims.
Accordingly, the $500 million evaporated to something around $100 million and Rainwater’s successor Kristy Nichols tried to implement a plan to simultaneously raise premiums and lower benefits to build the reserve back up—a plan that was revealed first by LouisianaVoice and which met instant opposition from employees, retirees and legislators.
The administration backed off that plan somewhat but the final compromise version left some retirees who lived out of state without coverage.
It also drove other retirees to other plans like People’s Health where premiums were cheaper and benefits better.
And that’s where the latest snag rears its ugly head.
Because the agency has been gutted of those employees who made it into such an efficient operation, things—big things—are starting to fall between the cracks and the plan apparently is to blame retirees and OGB’s fiscal collection department.
What has happened, according to word received by LouisianaVoice, is that OGB has failed to cut off coverage for retirees who self-pay for their coverage (through other programs) and who are “delinquent” in their premium payments.
It seems that OGB has not put “stop flags” on self-pay accounts that are in arrears for months but continued to pay claims. “Group Benefits has dozens of people who are late and they (OGB) are still paying claims to doctors and hospitals for X-Rays, MRIs, surgeries and prescriptions,” our source told us, adding that OGB initially told its fiscal collection department to ignore the delinquencies.
Now, though, OGB is sending out letters demanding payments for unpaid premiums.
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One such letter provided to LouisianaVoice demanded payment of $10,511 in premiums dating back to October 2014 and pharmacy benefits of $425.
The Feb. 18, 2016, letter to the retiree said coverage “on OGB-administered health plans will terminate in October 2014 for non-payment of the full premium. During this period our records show that you continued to use the health and pharmacy benefits of the plan.”
Notice that the letter was dated Feb. 18, 2016 but said coverage “will terminate” in October of 2014.
No reason was given for a 2016 letter warning of pending termination of coverage in 2014. But that is somehow typical of any holdover from the Jindal years.
The individual was told if the plan was to be retained, the retiree would owe $10,511.29. “Should you not wish to retain your coverage through OGB, any medical claims incurred by you since Nov. 1, 2014, will be re-adjudicated and you may receive bills from your providers for services rendered,” the letter said.
“Pharmacy benefits cannot be re-adjudicated; accordingly, OGB will recoup costs incurred…by you,” it said, adding that the cost of pharmacy benefits “wrongfully used by you” is $425.49.
“Please consider this as demand to pay the respective amounts in full to OGB by March 4, 2016,” the letter said. “Should we not receive full payment on or before March 4, 2016, we may initiate further action to collect this sum, including but not limited to referral of this matter to the Office of Debt Recovery, the Attorney General, and/or other collection means.”
Below that was an ominous warning in boldface and all capital letters that read, “THIS IS A DEMAND FOR PAYMENT OF MONIES DUE. PLEASE TAKE NOTICE AND GOVERN YOURSELF ACCORDINGLY.”
Our source said that OGB administrators plans to place the blame for the latest fiasco on retirees and its own fiscal collection department. “They have a plan to hide this because they are scared the public, the commissioner of administration (Jay Dardenne) and the governor will find out.” The collections department, the source said, has maintained a paper trail which will absolve it of any fault in the matter.
“OGB is trying to get money back on the sly,” the source added. “They (OGB) are mismanaged and there are a lot of people in this condition who were allowed to keep insurance and paid no premium for years.”
EDITOR’S NOTE: We would love to hear of any similar difficulties you may have had with OGB. Send your stories to: