Feeds:
Posts
Comments

Archive for the ‘OGB, Office of Group Benefits’ Category

Did Rainwater simply forget to mention those “other” states with fully-funded health insurance programs?

Posted in Governor's Office, Health Care, House, Senate, Jobs, Legislature, Legislators, OGB, Office of Group Benefits, Retirement on May 2, 2011| 5 Comments »

Commissioner of Administration Paul Rainwater told the Senate Retirement Committee at least half-a-dozen times last week that Louisiana was “one of only two states” to run a completely self-funded Preferred Provider Organization (PPO) that pays claims exclusively from premiums paid in by members who are state employees or retirees.

Rainwater also said the elimination of 149 jobs that would occur if the Office of Group Benefits (OGB) is privatized would mean a savings of about $10 million to the state.

Both comments bear closer scrutiny.

Yes, Louisiana is indeed “one of only two states” to have a fully-funded PPO. Utah is the other.

But what Rainwater failed to say was that virtually all states self-fund at least one employee health care plan. So says the National Association of State Personnel Executives (NASPE) in its July 2010 white paper on the “Challenges and Current Practices in State Employee Healthcare.”

Researched and written by Katie Meyer, Colleen Schlect, and Betta Sherman of the University of Chicago, the publication also directly contradicted claims by Rainwater (and Jindal), that privatization would be more cost efficient than the PPO plan presently being run by OGB.

Quoting “Combined Public Employee Health Benefit Programs,” a March 2010 health care containment and efficiencies brief for the National Conference of State Legislators, the NASPE publication said self-funded plans “can typically save between five and six percent in administrative costs relative to fully-insured plans.”

Rainwater has insisted that the state’s PPO which now operates at a 3.5 percent administrative cost—not paid by the state’s General Fund, but out of premiums collected from members—could be improved upon by a private company even though he admitted in last Tuesday’s committee hearing that private companies generally experience administrative costs of 10 to 15 percent and some even as high as 20 percent.

Several members of the Retirement Committee, including Chairman D.A. “Butch” Gautreaux (D-Morgan City) had some difficulty with the math in Rainwater’s claim.

The “other” of the two states that presently have fully-funded PPOs is Utah and that state’s program has administrative costs of about 4 percent, according to agency Director Jeff Jensen.

Rainwater also did not mention that other states are moving in the direction of self-funded PPOs—a contra-flow, as it were, to the direction Jindal and Rainwater are attempting to force the state health benefits program.

So, what is it that Jindal and Rainwater know that other states do not? Or, rather, what is it the other states know that this administration refuses to acknowledge?

Here’s what some state administrators have to say about self-funded programs—programs like Louisiana’s that Jindal is trying so desperately to sell:

“In return for assuming risk, we get rewarded from favorable experienced, said Frank Johnson, Executive Director of Employee Health & Benefits for the State of Main. “Being self-funded allows us greater flexibility in terms of benefit design and collaborating with providers in partnerships.”

Debbie Cragun, Human Resource Administrative Director for the State of Utah, says, “You are potentially looking at hundreds of thousands, if not millions saved by going self-funded from fully insured.

Anne Timmons, Director, Employee Benefit Division for the State of Maryland, said cost trends have been below the national average and self-funding has been a major benefit. “If we were fully insured, our costs would be significantly higher,” she said.

Paula Fankhauser, Employee Benefits Administrator for the State of Nebraska, said her state’s plan is sufficient self-funded now that that was not always the case. When it first transitioned to self-funding, it did so with sufficient financial resources. “The state was literally waiting for employees to pay their premiums so we could pay their claims,” she said. A major legislative overhaul of the program rectified those problems and Nebraska now boasts a positive account balance that can cover all claims under virtually any circumstance, she said.

Doug Farmer, Deputy Director of the Kansas Health Policy Authority said that state re-evaluates its program on an annual basis. “Every time we re-examine it, we come to the same conclusion,” he said. “When you have the resources to manage your own pool the size of a state, it is a benefit to be self-insured.”

The NASPE study also said that among self-funded states, there is generally a higher level of satisfaction with current funding practices and claims payment. And most state officials seem to agree that self-funding health plans affords greater flexibility in terms of design and administrative cost-savings.

For example, self-funding has helped states implement wellness programs. “Being self-funded provides an incentive to implement wellness programs, since we pay the bills while someone else does the implementation and day-to-day management of the program,” said Daniel Hackler, Director of the Indiana State Personnel Department.

As for the elimination of those 149 jobs creating a $10 million savings to the state, Rainwater also forgot, or neglected to mention that those 149 salaries do not come out of the state’s General Fund. They are paid from the premiums paid by state employees and is part of the agency’s 3.5 percent administrative costs.

And any OGB surplus, by law, “shall not be used, loaned, or borrowed by the state for cash flow purposes or any other purpose inconsistent with the purposes of or the proper administration of the Office of Group Benefits.”

Read Full Post »

Of water slides and state health plan comparisons

Posted in Governor's Office, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, Politicians, Retirement, Transparency on April 29, 2011| 22 Comments »

Last Tuesday, as testimony wound down before the Senate Retirement Committee over the proposed sale of the Louisiana Office of Group Benefits, committee Chairman A.D. “Butch” Gautreaux (D-Morgan City) commented that perhaps the Jindal administration should consider selling the State Capitol because “it would make a great waterslide.”

Besides Commissioner of Administration Paul Rainwater’s describing published accounts about the administration’s shenanigans as reading “like a John Grisham novel” and Rep. Rogers Pope, reacting to Rainwater’s annoying habit of consistently giving evasive answers to his questions, saying that Rainwater “should be on Dancing With the Stars,” the committee hearing produced precious little levity.

But some comparisons of what was said earlier and what was said later might shed some light on the inconsistencies of statements by Gov. Bobby Jindal and Rainwater. Comparisons between Louisiana’s Preferred Provider Organization (PPO) and that of the state of Utah also are somewhat revealing. The state’s PPO plan is that part of the Office of Group Benefits (OGB) that contracts with doctors and hospitals for services to members and which Jindal is so desperate to privatize over the objections of plan members and legislators.

Jindal at first was pragmatic about his proposed auction of OGB, saying that it just made good financial sense for the state to rid itself of the burden of serving as a health insurance agency. Besides giving him a couple of hundred million dollars to plow into the $1.6 billion budget abyss, it would eliminate 149 state jobs, something he seems determined to do.

But in Friday’s Baton Rouge Business Report, Jindal shifted gears oh so subtly when he said his reasons for wanting to divest the state of OGB was rooted as much in his philosophical opposition to government-run health care–he equated it to his opposition to President Barack Obama’s health care plan–as any other reason.

As Archie Bunker might have said, he switched from pragmatic to philosophical in the blink of a hat.

Likewise, consider the words of Rainwater. A week ago, he said the reason OGB would be attractive to buyers in the private sector was because the $500 million existing surplus would allow a new owner to pay claims out of that reserve without the buyer having to dip into its own reserves initially.

But on Friday, Rainwater sent out a two-page letter to OGB members in which he emphatically claimed that was not the case at all. These are his words, lifted directly from that letter:

“Strong restrictions remain in place governing the OGB surplus, and it will continue to be utilized just as it is now – solely for the purpose of providing health coverage for plan members.”

So, with Rainwater making such a strong promise (in boldface type, no less), why was it necessary to inject those four notorious lines into HB-32 which would have the effect of directing the state treasurer to divert any surplus funds from OGB to the state’s General Fund when current law strictly prohibits just such action by the administration?

That’s a question that only Jindal or Rainwater can answer but so far they have not addressed that provision of the bill.

Finally, there’s the comparison between Louisiana and Utah.

Why? Because no less than half-a-dozen times during last Tuesday’s Retirement Committee hearing Rainwater alluded to the fact that Louisiana is one of only two states in the U.S.—Utah being the other—that has a completely self-administered system. Put another way, the two states are the only ones that pay PPO claims exclusively in-house.

Each time Rainwater made the statement that Louisiana was one of only two such systems, he said it like it was a bad thing. And he said it so often that Gautreaux, apparently weary of hearing the line repeated as if by rote, finally interrupted Rainwater to say that after hearing it said repeatedly, everyone present was now aware the fact and there was no further need to dwell on that point.

But perhaps the point needs to be scrutinized more closely.

So, with that in mind, CNS contacted Jeff Jensen in Salt Lake City. He is Director of the “other” program in Utah.

Strangely enough, he said when asked the direct question that the Republican administration of that state had introduced HB-404 which seeks to privatize the Utah group benefits program. What a coincidence.

“Our program has worked well for 30 years,” he said in a telephone interview with CNS.

How well? Well, the Louisiana OGB has an administrative cost of roughly 3.5 percent compared to about 4 percent for Utah. Among private insurance companies, administrative costs run, on average, between 10 and 15 percent–some even higher.

“We don’t have quite the surplus, or escrow, that Louisiana does,” Jensen said. “When we accumulate a surplus at a certain level, we refund that to our members by reducing premiums.”

In Louisiana, members are happy with OGB because it averages no more than 48 hours on claims payments. In Utah, Jensen, said, the average is about 14 days, “but improving.”

In Louisiana, privatization of OGB would cut the number of employees in that agency by half, Rainwater has been quoted as saying. Later, the number was given as 149, meaning that the agency now employs about 300 people to service the health insurance needs of approximately 220,000 active members, retirees, and dependents. That’s one OGB representative for every 733 members.

Jindal said that number is far too many and is wasteful.

Utah currently employs 230 people to service the health needs of 140,000 members, or one representative for every 609 employees.

The comparisons, however, end there. Utah’s State Capitol is not conducive to use as a water slide.

Below is the blurb from the Business Report followed by Rainwater’s letter in its entirety:

Jindal says La. shouldn’t run health insurance program

Gov. Bobby Jindal is pitching his bid to privatize a health insurance program for state workers as a fight against government-run health care, equating it to his opposition to President Barack Obama’s health overhaul. Jindal says that he doesn’t think Louisiana should be in the business of running a health insurance program, as he tries to gain support for his plan to hire an outside company to run the program currently run by the Office of Group Benefits. The idea faces significant opposition from some lawmakers and current and retired state employees. Jindal says privatization would cut in half the 300-employee group benefits office workforce and generate $10 million in annual savings for the state, in addition to an up-front, lump-sum payment that could top $150 million. “In a time of serious fiscal challenges, these funds, in future years, could go a long way toward protecting critical taxpayer-supported services that benefit all our citizens,” says Paul Rainwater, commissioner of administration and Jindal’s budget chief. Rainwater made the statement in a letter to Office of Group Benefits plan members. He assured members that potential privatization would not affect service, coverage, benefits or premium rates.

Rainwater’s letter:

April 29, 2011

Dear Plan Member,

I write to you regarding the possible further privatization of the Office of Group Benefits (OGB). In the past few weeks, numerous rumors about this proposal have caused concern, among government employees and retirees alike, over what it might mean for their future health coverage. I certainly sympathize with those concerns, and I would share them too, if the rumors were true – but they are not.

As Commissioner of Administration, with responsibility for overseeing OGB, I believe strongly in the need to provide you with the facts, to separate rumors from reality, and hopefully alleviate any concerns you may have.

As you know, OGB has long used private companies to deliver various health plans, including the most popular plan, the HMO. These plans operate successfully and provide quality service, with administrative oversight by OGB. Only the PPO plan – which provides coverage for 61,469, or 27 percent, out of a total of 225,870 government employees, retirees, and dependents covered through OGB – is self-administered by state government, and it is only this plan, under the proposal, that would change in that regard.
My pledge to all plan members is this:

• You will continue to receive quality service and coverage regardless of the potential further privatization of OGB.

• Premiums rates, likewise, would be unaffected by this transition, and increases, when they occur, will continue to be reflective of medical market rates, as they are now.

• Benefits for all plan members, including retirees, will NOT change. We will continue to provide an HMO, PPO, and other plans with a benefit structure that is the same or better than the health plans OGB now offers.

• Current eligibility rules for coverage will not change for all plan members, active and retired alike.

• And OGB’s administrative oversight will continue, securing the continued success of all the plans.

As for the allegation that OGB’s surplus will somehow be “stolen” and diverted for other budgetary purposes, let me be absolutely clear: This claim is categorically untrue. Strong restrictions remain in place governing the OGB surplus, and it will continue to be utilized just as it is now – solely for the purpose of providing health coverage for plan members.

So why, then, explore such a proposal? Well, the simple fact of the matter is that taxpayers, who pay 75 percent toward plan member premiums and the cost of providing coverage, also have a stake in this discussion. A preliminary estimate suggests that a financial transaction with a commercial health provider involving the HMO and PPO plans could generate for the state at least $150 million. In a time of serious fiscal challenges, these funds, in future years, could go a long way toward protecting critical taxpayer-supported services that benefit all our citizens.

Our research of best practices shows that every other state besides Louisiana that offers a PPO plan does so through private companies, so we know it can be done with positive results. In the coming weeks we will engage an expert financial advisor to assist us in a thorough evaluation of this proposal, and to help us make a careful determination to proceed on a course of action that’s in best interest of both plan members and taxpayers.

This lengthy evaluation will also prepare us to present a detailed presentation of the proposal to you, as well as to the Legislature’s appropriation and finance committees, whose members have jurisdiction over OGB and whose approval would be needed for any contract involved.

In closing, I hope that expressing to you the reality of the situation, which runs so counter to the rumors you have may have heard, has helped to dispel concerns these rumors have caused. As we gather more information, I will see to it that you are given updates as they develop. More importantly, I will make sure that you continue to receive the quality service and coverage from your health plan that you expect and deserve.

Sincerely,

Paul Rainwater
Commissioner of Administration

Read Full Post »

Bobby’s boys grilled on OGB proposed sale during Senate Retirement Committee hearing

Posted in Governor's Office, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, Teague on April 27, 2011| 8 Comments »

Gov. Bobby Jindal’s attempt to sell the Louisiana Office of Group Benefits (OGB) appears to have been sidetracked for at least 60 days, a Senate committee was told in Baton Rouge on Tuesday.

Commissioner of Administration Paul Rainwater attributed the delay to the necessity of drafting a second request for proposal after negotiations with Wall Street banking firm Goldman Sachs bogged down.

A parade of current and former state employees, including one active and one retired state district judge made known their opposition to the proposed sale of OGB to the Senate Retirement Committee here Tuesday.

The committee, chaired by State Sen. A.D. “Butch” Gautreaux (D-Morgan City), heard testimony for more than two hours and, as Gautreaux noted on two occasions, no one present asked to speak in favor of the sale of the state agency that provides medical coverage for 220,000 active and retired state employees and their dependents.

Rainwater, Division of Administration spokesman Dirk Thibodeaux, and newly-appointed OGB CEO Scott Kipper attempted to explain the rationale behind Gov. Bobby Jindal’s desire to place OGB on the auction block in an attempt to garner up-front money to help close a projected $1.6 billion for Fiscal 2011-12.

Members of the committee, along with several state representatives who sat in on the proceedings peppered Rainwater with questions about promises that the sale would not adversely affect OGB members. Those questions were met with vague, indecisive responses that frustrated Gautreaux and at least one member of the House.

State Rep. Rogers Pope (R-Denham Springs) at one point referenced a popular television show to express his frustration at Rainwater’s evasive answers.

Pope, a retired school administrator, is a member of OGB, and asked at one point, “Did I not hear it said here this morning by Mr. Kipper that OGB has a very low administrative cost, like 3.5 percent?”

“That does not mean a private provider cannot do it better,” Rainwater said, adding that the purchase contract would likely stipulate a limit on premiums for five years.

“What happens after five years?” Pope asked. “You and I won’t be here and we both know that. I also heard you say that this has never been done before. Is this (the proposed sale) a trial balloon?”

“We won’t know that until we sit down to negotiate a contract,” Rainwater said.

“Well, if there is no supporting data, how did you analyze this to reach your conclusions?”

“We just think it makes sense to look at something different and more efficient,” Rainwater said.

“You need to be on Dancing With the Stars,” Pope quipped.

State Rep. Hollis Downs also sat in on the proceedings and asked a number of insurance-related, technical questions.

Both Rainwater and Thibodeaux conceded that a private provider would probably have administrative costs of at least 10 to 15 percent because of the need to realize a profit on its investment as well as tax liabilities not faced by OGB.

Rainwater said on at least three separate occasions that there would be “no negative impact on those covered” by OGB but made no mention of any possible impact on any future state employees not now covered.

He said that Louisiana and Utah are the only two states in the U.S. that have their own state administered PPO.

Rainwater said there has been much misinformation bantered about in recent weeks that reports took on the flavor of “a John Grisham novel.” He said the confusion may have cost the administration its opportunity to sale OGB and to involve smaller companies in the process. He denied that Wall Street banking firm Goldman Sachs had any input in the drafting of the recent request for proposals for a financial advisor to do an assessment of OGB and to market the agency to potential buyers.

“Unfortunately, we did not finalize the contract with Goldman Sachs. We have since notified Goldman Sachs that we will not issue a contract because we could not agree on terms,” he said.

Capitol News Service reported last week that it was Goldman Sachs that pulled out of negotiations after the state refused to indemnify Goldman Sachs from any litigation stemming from the sale of OGB.

Gautreaux and fellow Retirement Committee member Sen. Ben Nevers (D-Bogalusa) tag-teamed Rainwater in attempts to learn how the administration could guarantee that state workers would be protected from increased premiums and reduced benefits.

Efforts to elicit guarantees met with only general, vague responses. “We would only negotiate a contract that would favor state employees,” Rainwater said at one point. “We’re not going to create a plan that causes a spike in premiums.”

Rainwater also said there was a “high probability” for reduced claim costs. He said that while 149 OGB jobs would be eliminated, the administration was trying to be creative in its efforts to protect employees.

“There’s nothing creative about selling something,” Gautreaux said. “The state is in the education business and we’re in the hospital business.”

“We’re addressing education with charter schools in New Orleans,” Rainwater said.

“Your belief is not universal as to any improvement in education with your charter schools,” Gautreaux interrupted.

Gautreaux also revealed his growing irritation at his inability to elicit answers to specific questions when Brady, Rainwater, and Kipper repeatedly said they did not have information at their fingertips but would get back to him with it.

“Each of you has a letter from me that I sent notifying you of this hearing. In that letter, I instructed each of you to have this information available today and to have someone here who could address these questions,” he said. “Did you bring anyone with you who has this information?

When told no one was there, he then told Brady, “I want you to get up, go out in that hallway, and call someone who has the answers to these questions. And I want you to get them over here now.”

At one point in the questioning, Rainwater told the committee, “It’s clear in the statute that the Division of Administration has the authority to move forward.”

The law creating OGB does provide that the agency may be sold by the governor without legislative concurrence. But to execute the sale, DOA would need to contract with a financial advisor to assess the value of OGB in order to attract an accurate bid on its purchase.

Any contract with a financial advisor, however, would need legislative concurrence, a point not lost on committee members.

Also testifying before the committee were Judge Bob Morrison of the 21st Judicial District (Livingston, St. Helena, and Tangipahoa), representing the State District Judges Association, retired Judge Ronnie Cox, vice president of the Retired Judges Association, Fred Foret or the Retired State Employees Association of Louisiana, former OGB CEO Tommy Teague, his wife, Melody Teague, and James Taylor, president of the Retired Teachers Association.

Cox said the retired judges were unanimous in their opposition to the sale of OGB because OGB pays claims within 48 hours and the judges are satisfied with the service provided by the agency.

Foret pointed out that Teague took over OGB when it had a $100 million deficit and took it to its current $520 million surplus. “He must have been doing something right,” he said, “so they fired him.”

Teague was fired from his position on April 15. He said no reason was given him by Brady when he was terminated.

Taylor, whose organization has 22,000 members, said he first became aware of the intentions of the administration to sell OGB last fall “before it was even an issue when I began getting phone calls from Ruston retirees.”

He said his membership “is satisfied that this effort is not based on sound judgment. My members are not interested in efficiency if it’s not effective.”

He said a private company would necessarily be driven by profit. “Why change on of the most effective operations in state government? Some of us are too old to buy hope,” he said. “They tell us they’re going to take care of by ‘writing it into the contract.’ I know better than that. I’m also an attorney and I’ve read too many contracts to fall for that line.”

“What’s the rush?” asked Morrison. “The money from the sale is not even in the administration’s proposed budget, so it’s not going to help this year. Title 42.854(C) says in clear terms that money from OGB may not be used for the general fund. That’s the law.

“Now comes HB-32 which would direct the state treasurer to divert any OGB surplus into the general fund. If you amend HB-32 to delete those four lines, we will have time to study this more thoroughly.”

As testimony wound down, Nevers said he hoped there would be “full legislative debate” before executing the proposed sale.

Nevers asked Rainwater when a new RFP would be issued.

Brady said a final draft was expected “within a few days.”

“Did you have any consultants working on the draft?”

“No, it’s being done in-house,” Rainwater said.

“When will it be available?”

“Next week.”

At that point, Gautreaux jumped into the discussion. “What part of this process don’t you want known?” he asked. “What are you keeping from us? What’s the secret?”

“We will do this under Office of Group Benefits rules,” Rainwater answered.

“What part of this RFP will have legislative oversight?” Gautreaux then asked.

“What RFP has ever had legislative oversight?” Rainwater said.

“Thank you,” said Gautreaux.

When Rainwater tried to say that he did not know of a single state that does not provide benefits, Rep. Jack Montoucet (D-Crowley) shot back, “Wisconsin. Ohio,” in apparent reference to controversies that have swirled around employee benefits in those states in recent months.

“You’re going to do a study after you do the RFP? Maybe you don’t need an RFP to see that you have $500 million in the bank. You don’t need an RFP to know that OGB has been doing a good job,” Montoucet added.

Gautreaux expressed his skepticism of Rainwater’s promise to protect OGB members in any contract negotiated. “I’ve looked at a few contracts in my day. The state’s contract with the Saints is a good example of the state’s ability to negotiate,” he said of the contract that obligates the state to pay the Saints millions of dollars per year to keep them in New Orleans and the state’s questionable contract to lease office space from Saints owner Tom Benson at rentals considerably higher than agencies had been paying.

“The way I see it,” Gautreaux said, “we’re gonna take the best run agency in the state and sell it and fire the man who made it the best run agency. We’re moving forward with moving forward, as near as I can see it.

‘I find it curious that the CEO who did such a great job is now on the street. I am at a lever of extreme dissatisfaction. This is not our last meeting on this,” he said.

“You talk about transparency but I haven’t seen that. The public is not satisfied with this proposal. There is no public support for what you’re doing. We are going to turn the fire up even more until we get to the bottom of this,” he said.

Read Full Post »

Bill would transfer OGB surplus to state general fund

Posted in Governor's Office, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, Teague, Uncategorized on April 23, 2011| 18 Comments »

Rep. Jim Fannin (D-Jonesboro) has authored a bill that would alter current law by allowing Gov. Bobby Jindal to use much of the current $500 million Office of Group Benefits (OGB) surplus to help plug the gaping $1.6 billion state budget deficit.

Fannin is Chairman of the House Appropriations Committee.

Controversy has swirled around Jindal’s attempts to privatize OGB because of the manner in which the administration brought Wall Street banking firm Goldman Sachs in on early efforts to draft a request for proposals (RFP) for a financial assessment of the agency and to marked OGB to potential buyers.

Goldman Sachs, after helping draft the RFP, turned out to be the only company to submit a proposal and now stands to reap up to $6 million for its work in helping to sell the agency.

The law that created OGB stipulates that benefits for about a quarter million state employees, retirees and their dependents may be paid by any provider. That language would allow Jindal to sell the agency without the necessity of legislative approval, said a source within the Division of Administration.

Commissioner of Administration Paul Rainwater said there would be no financial impact on OGB members.

But if OGB is sold, it would eliminate about 150 jobs in the agency and would also allow any purchaser to raise premiums, reduce benefits, or both, contract with a third party administrator or re-sell OGB to another buyer. Either way, once sold, all state control of OGB would be lost.

Besides the $500 million surplus currently on the OGB books, the agency also collects about $1.1 billion per year in premiums. State Sen. Butch Gautreaux (D-Morgan City), chairman of the Senate Retirement Committee and a member of the OGB board, has made no secret of his opposition to the auctioning off of OGB.

He said if premiums are worth $1 billion and the agency has a $500 million surplus, then the selling price should be at least $1.5 billion. “I support getting rid of a state agency that doesn’t work,” Gautreaux said. “But this (OGB) isn’t costing the state. This is a great value.”

Rainwater acknowledged as much when he said the OGB $500 million reserves are an attractive selling point because the private company that ultimately purchases the agency would not have to dip into its own capital to pay claims.

He said the current surplus exists because of initiatives overseen by former OGB CEO Tommy Teague, whom the administration abruptly fired on April 15. No reason has been given by Rainwater for Teague’s firing.

Teague was only six months away from qualifying for retirement when he was shown the door.

Gautreaux said he fears that privatization will drive up costs for state workers who are already facing increased contributions to their retirement plans. He charged that Jindal is targeting state workers, who could lose their jobs if they object publicly to the sale. “I call it predatory politics,” he said. “You go after the weakest of the herd.”

Preliminary estimates indicate that whoever purchases OGB would receive about $300 million to $350 million of the agency’s $500 million surplus with the state receiving the remainder.

But R.S. 42:854(C) has stood between Jindal and his desire to reap any political hay in the form of a cash influx. That statute says, “Not withstanding any other provision of law to the contrary, any money received by or under the control of the Office of Group Benefits shall not be used, loaned, or borrowed by the state for cash flow purposes or any other purpose inconsistent with the purposes of or the proper administration of the Office of Group Benefits.”

Now, Fannin’s bill, if approved by the legislature and signed by Jindal, the governor’s signature being a virtual certainty, would change all that. Jindal’s signature, of course, would be a virtual certainty.

HB-32, already assigned to Fannin’s Appropriations Committee, reads in part:

“After satisfying the requirements of the Bond Security and Redemption Fund as provided in Article VII, Section 9(B) of the Constitution of Louisiana, the (state) treasurer shall, notwithstanding R.S. 42:854-(C), transfer into the Overcollections Fund provided for in R.S. 39:100.21, the proceeds generated as a result of the sale or other transaction by the Office of Group Benefits which has the effect of transforming its operations.

In general layman’s terms, that means the legal prohibition of using OGB funds for the state’s general budget would be removed, making it legal for much of the OGB surplus to be used by the state to plug its budget hole.

Though the two statutes clearly conflict, under rules of construction, the new statute would take precedent, or overrule the older law, according to Terry Hessick, a retired attorney for the Louisiana State Board of Private Investigator Examiners.

Hessick wrote a letter to Richard Manship, manager of the Baton Rouge Advocate, taking the newspaper to task for its lack of coverage of the OGB controversy.

The Baton Rouge paper ran a brief story on April 16 on Teague’s firing but nothing about details of the proposed sale until a week later, on April 23.

The text of Hessick’s letter:

Dear Mr. Manship:

As we edge ever closer to the anticipated privatization of the Office of Group Benefits, with its probable huge negative impact on state employees, retirees, and their dependents, I am amazed that the Advocate, as well as our local television news departments, has given little or no exposure to this potential catastrophe. As a subscriber, each morning I look for any articles on the sale of OGB, but the only thing I found recently was the announcement that Tommy Teague had been fired. The stories about this sale have been available on the internet for weeks, but not in the Advocate.

You may not think that the OGB sale is newsworthy or is of little interest, but the sale would affect about 150,000 state employees and retirees, and another 100,000 or so of their dependents, all of whom depend on OGB for their health, medical and prescription coverage. Also, the attempts of the Jindal administration to put the deal together in relative secrecy; the fact that Goldman Sachs wrote the RFP for doing the deal and was the only bidder for the services; the fact that Goldman Sachs stands to make $6 million for doing who knows what; the fact that the half-billion-dollar surplus or reserve which the OGB has accumulated would be divvied up between the state treasury ($150-200 million) and the eventual purchaser ($300 million); the fact that the OGB members and their dependents can only watch while the monies set aside to pay their medical expenses are plundered and carted off by the administration and some private party; the probability that those members will have to make up the missing monies by paying ever-increasing premiums for what can only be reduced services; and, the probability that increased premiums required by a private insurer will, in the near future, place additional burdens on the state treasury and on all Louisiana taxpayers; should induce the Advocate and other credible news sources to at least investigate, ask questions, and demand answers. In other words, send out your reporters to do their jobs, instead of sitting on this story.

To allow you to catch up with this ongoing story, I have attached several articles from the internet, including those published by TPM, louisianavoice.com, winzerinsurance.com, politicslaforums.com, and devtimessw.com. I have also attached a copy of my recent letter to the editor, which the Advocate chose not to publish. I understand that others have written letters to the editor on this subject, including the Louisiana Retired Employees Association, none of which have been published. It seems that the Advocate thinks it is more relevant to publish the endless bickering about the Baton Rouge to New Orleans passenger railway, which is unlikely to be funded or built in our lifetimes, than to publish letters which would bring to the attention of your readers an event which will impact the lives and health of a quarter of a million Louisiana citizens.

I do not know why the Advocate has chosen to ignore the privatization (sale) of OGB unless it fears the wrath of the Bobby and his henchmen or it actually approves of the disservice which this administration is doing the state employees. For many years, the New York Times has had as its motto, “All the news that’s fit to print.” Maybe the Advocate should adopt a similar motto: “All the news that’s SAFE to print.” I am disappointed in the Advocate.

Very truly yours,

Terry F. Hessick
Attorney at Law
Retired State Employee

Read Full Post »

Got promised? Weighing the words of candidate Jindal vs. actions of governor Jindal: a study in deliberate deceit

Posted in Civil Service, Education, Governor's Office, House, Senate, Layoffs, Legislature, Legislators, OGB, Office of Group Benefits, Teague, Transparency on April 22, 2011| 7 Comments »

Perhaps this should be filed under “How Soon We Forget,” or maybe it shouldn’t be remembered at all because of the bitter irony it invokes. Either way, we felt a little reminder of campaign promises past might give you an insight into political realities present and future.

Candidate Bobby Jindal had an interesting campaign flyer in the last gubernatorial election that someone found and sent to LouisianaVoice.

It’s all about how touchy-feely he was about state employees. It’s almost enough to give you a warm fuzzy if it weren’t for the foreboding chills it invokes when one considers that his real motivation is not the welfare of state employees or even the citizenry of this state, but the consolidation of his own political power base.

While state employees are being laid off and in some instances, as in the case of Office of Group Benefits CEO Tommy Teague, fired outright, Jindal continues to campaign weekly outside the borders of Louisiana, adding more and more to a campaign war chest already crammed with more than $10 million.

When he campaigns in California, New York, Texas, and elsewhere, the costs of those trips—including flight costs, hotel accommodations, meals, and security detail (state police who accompany him on each and every trip)—are not reimbursed to the state by the Republican Party. They are borne by Louisiana taxpayers. And lest you thought he travels alone, rest assured he takes staff members with him on those jaunts. When George Bush campaigned for a second term and when Barrack Obama campaigns, the costs were—and are—reimbursed by their respective national parties.

All his hopping from fundraiser to fundraiser at out-of-state venues must surely raise the question: just why is someone in California or Wisconsin or Montana so vitally interested in a governor’s race in Louisiana? That’s the question voters must ask themselves when they enter the polling booth next fall.

It’s a good bet that laid-off state employees or employees of agencies that Jindal has privatized or plans to privatize will be asking.

It’s a certainty that employees with serious health issues would like to know why they stand to lose their health benefits after years of loyal service, some of whom even fell for Jindal’s “love of state employees,” pitch and voted for him—not once, but twice—for governor.

Here, then, are the verbatim contents of that long lost (at least he must wish it was lost) flyer that, with any justification, will bite him in the backside next fall:

As a former state employee, I know firsthand how important it is that we protect state employees and state retirees.

I have served the state as Secretary of the Department of Health and Hospitals and as President of the University of Louisiana System.

My mother has been a state employee for three decades. I know that she and the thousands of people who serve our state at every level dedicate themselves on a daily basis to ensuring that Louisiana is moving forward, and I strongly believe that we must support these workers in their efforts.

As my campaign for Governor continues to intensify, I expect that some people will begin to spread false rumors about the future of state employees under my Administration.

I wanted you to hear it from me that I will be a friend and supporter of both state employees and retirees.

Any statements to the contrary are simply false.

I am committed to bringing more jobs and more economic opportunities to Louisiana, and I want to see state workers and retirees supported for the work they do.

In addition, I have been a vocal supporter in Congress of legislation to protect state employees and retirees from unfair Social Security provisions, specifically, the Government Pension Offset (GPO), which lowers the dependent benefits a state employee with a spouse working in the private sector receives through Social Security, and Windfall Elimination Provision (WEP), which penalizes public school teachers and state workers who have second jobs.

I am a co-sponsor of the Social Security Fairness Act (H.R. 82) in the U.S. House of Representatives, which would repeal both the GPO and the WEP.

I do not believe we should punish people for working, and certainly do not believe teachers and state workers in Louisiana should be singled out for penalty.

These men and women work incredibly hard to ensure a bright future for our state and our children, and they deserve to receive adequate Social Security benefits.

My mother is a state agency employee and I myself have paid into the State Teachers Retirement System, so I know firsthand how unfair these provisions are to state workers. I fully understand the importance of rectifying this problem so state workers and teachers are not unfairly penalized for their service.

I commit to you that I will continue to fight to protect all Louisiana workers as Governor of Louisiana.

There you have it. The words in that flyer certainly take on a hollow ring today. We have only one word for Gov. Jindal and his promises: pandering. By any definition, it’s pandering in the sorriest sense of the word. Does anyone remember Jindal’s uttering a single word as governor about the GPO or WEP? Didn’t think so.

Has anyone heard a single encouraging word from him to state employees. No? Hmm.

Does any remember another campaign promise to block any attempt by legislators to give themselves a pay increase? Probably not, but he certainly did, in another flyer like the one quoted above. Yet, what did he do when they voted for a 123 percent pay raise back in 2008? He said he would not veto the pay hike. Only when he was swamped with public outcry such that his email literally shut down, did he finally acquiesce and veto the action.

Turn your attention away from the NBA playoffs and LSU and Saints football long enough to do your homework. Weigh what he says against what he does. Consider the contracts handed out to donors to his wife’s foundation. Think about the motive behind his interstate campaign trips. Look below the surface for his real reasons for wanting to privatize so many state agencies and find out who is getting the contracts for those agencies. Most of all, try to put yourself in the place of that state employee who, facing grave health issues, finds himself on the street.

Read Full Post »

« Newer Posts - Older Posts »