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.
(CLICK ON IMAGE TO ENLARGE)
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:
louisianavoice@yahoo.com
Louisiana Voice 
Didnn’t these retirees know that the premiums needed to be paid or did OGB not notify them of the monthly amount due?
I am not certain but in my case, I am now covered by People’s Health. But I make certain my doctor knows this. If a retiree has a different insurer but does not inform his or her doctor, the doctor may continue to bill OGB in the belief that OGB is still the insurer. That’s just a guess. The alternative would be as you suggest; retirees not paying their premiums but as a retiree with a few health issues, I can’t imagine letting my coverage lapse.
Just one factual error: the state pays 75% of the employee’s premium, not 25%. That’s why it was such low-hanging fruit for Jindal and Nichols to steal.
Correct. Thanks for the heads-up. The error has been corrected.
Since the vast majority of these amounts won’t break five figures (the example letter is an exception), the matter can be efficiently litigated in small claims court if the retiree lives with the city limits of a major city.
For others (such as the example provided), district court will be required, but I understand at least one trial lawyer is willing to file and litigate at cost plus 15% of the take from the inevitable judgment.
If all this is true, I guess at least the current governor’s legal expenditures will effectively collect some of the funds that the previous administration never should have let go out the window in the first place.
Best thing to do when you get one of these letters is to call and work out an installment plan for payback because it’s malfeasance in office not to pursue collection, so neither Edwards nor Dadrenne has the option of just saying, “forget it.” All around, not a good situation to be in for all concerned.
This is exactly why I, as a retiree living in Texas, was forced to look elsewhere for insurance. I just hope that we don’t discover that Jindal and his cronies have ruined our state retirement benefits.
You may want to check out new legislation House Bill 48 by Ivey that proposes to add 5 members to the LASERS Board of Trustees. This potentially sets the groundwork for future unfavorable changes.
What a rip. I’m now glad I didn’t drop OGB’s supplemental coverage (though it is more expensive than some private plans) for a reason I never even considered, i. e., that OGB would erroneously pay claims and then expect me to reimburse them long after they did. Utterly ridiculous.
I find myself wondering how any of us are able to keep up with the convoluted way our health care system is funded. I now take care of my very elderly mother’s business. She has nothing to do with the OGB, but has Medicare and an AARP Supplemental Insurance plan. Figuring out her extensive medical bills is like working a puzzle. The last time I got in a dispute with a provider, I finally got mad, hung up, and paid the bill – probably just what they were hoping.
It is disingenuous of our government to expect people to manage these things conscientiously and nobody now even talks about a single-payer system that would make it possible for most of us to understand the medical billing/payment process.
It is equally disingenuous of OGB to expect many of the people they are going after to even know OGB has paid claims they shouldn’t have. I just paid the balance of a bill from a surgery my Mother had a year ago – It has taken that long for the surgeon’s office to figure out who was paying what and when.
As far as thinking they can hide what they are doing from the commissioner of administration – That is the height of disingenuousness – not a real word, but you know what I mean.
So much for privatization!
Reblogged this on tmabaker.
I would love to tell you about my fiasco with OGB. I retired in Juy 2014 with 33 years of service and OGB coverage. I filled out the paperwork to continue with OGB and paid premiums for 2 months. In October of 2015, 15 months after I retired, I get a letter from DHH HR stating I owed insurance premium for Sept 2014. So when I pursued it over the phone with DHH and OGB, who gave me a case number but no return follow-up, because I thought I had paid for that month and no one could verify it. I was finally referred back to my agency HR after I called OGB several times to see what they found out. My former agency HR dept told me that my insurance premium had not been paid since I had retired, what OGB had told them. I went to OGB in person and was told I was not coded as a retiree in the system. They told me I should not have had medical and pharmacy benefits all that time ( ps I had a same day surgery during that time, no questions asked). OGB says my agency did not turn in the proper paperwork, but my agency had documentation that they had sent the forns in to OGB. To make a long story short, they placed me on an agreed upon payment plan. I wish I had been notified of this mistake earlier. Anyway, it took 19 months after retirement for me to be coded correctly in the system. It took from Oct to Feb, 5 months, to get things straight, only because I pursued it. Yours truly, Jamie
On Thursday, March 3, 2016, Louisiana Voice wrote:
> tomaswell posted: “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 th” >
so much for Jindal’s famous run for President, after wasting 8 years in not properly runnung the state and driving up debt like a drunken sailor.