That’s actually less than the $88.5 in total medical spending for 2012, which ended Dec. 31. That year, though, the school system was able to make use of a $6 million surplus that had built up in the health care fund.
An advisory panel of active and retired East Baton Rouge Parish school system employees on Thursday heard presentations from two large insurance networks seeking to administer the claims of about 2,700 retirees through a Medicare Advantage plan.
The panel, however, held off making recommendations because the school system is negotiating “best and final” offers from Humana and United Healthcare.
The panel also could urge the rejection of both offers and recommend that the school system continue to offer supplemental insurance to these Medicare-eligible retirees.
Catherine Fletcher, chief business operations officer for the school system, said her office is not advocating for any particular approach, but said the school system cannot afford inaction.
“If we don’t make a major change in how we do things, we’ll be back here again next year,” Fletcher said.
Last summer, the School Board, facing unexpected opposition, voted down proposals to shift Medicare-eligible retirees into a private exchange where they could purchase a Medicare supplemental insurance plan. The move was estimated to save more than $8 million, but the school system settled for about $6 million in savings by increasing premiums for employees, with retirees taking a larger share of the load.
The school system is facing another hole in 2014.
To get ahead of the problem and prevent a repeat of last year’s strong opposition, Superintendent Bernard Taylor began talking about this issue in January, including issuing requests for proposals to interested insurance companies.
Taylor also formed the Retiree Health Insurance Advisory Committee to help him sort out what to do. He has been pressing the School Board to make a decision on this matter by its April 18 meeting.
Board member Barbara Freiberg on Thursday, however, told the Retiree Health Insurance Advisory Committee that the board is likely to vote on the health insurance plan only for active employees on April 18, but delay taking action on retiree health insurance until the board meets again on May 2.
Dividing active from retired employees, however, has consequences.
Representatives from Mercer, a health care consulting firm, told the committee that without changes, the firm is projecting the need to increase retiree premiums by 10 percent if they are not eligible for Medicare and by 25 percent if they are, given their respective medical claims history, but active employee premiums would stay the same.
That proposal, however, did not sit well with everyone on the panel.
Phyllis Crawford, principal at Sherwood Middle Academic Magnet School, urged for an across-the-board increase in premiums for active and retirees, coupled with a range of other cost-cutting moves. For instance, she said the school system could force some employees to get coverage through their spouse’s insurance.
“We are on this one mono track of Medicare Advantage Plan,” she said. “I know that’s what (Taylor) wants, but that’s not what is best for all of us who have worked so hard.”
Crawford said she is also concerned that over time more and more doctors will refuse to take Medicare in response to changes being made to the federal program.
Fears of the future of Medicare and the benefits of staying on the school system’s insurance, even if it’s more costly, have been expressed during this lengthy debate.
Sue Gambrell, a member of the Baton Rouge Retired Teachers Association and member of the retiree insurance committee, said she made a motion at the association’s March 14 meeting asking if people in attendance wanted to stay with the parish school system’s insurance.
“Every hand went up,” Gambrell said.
On Thursday, Mercer updated its projections for theSusan Nelson, interim director of communications and external relations for the district, said her office is crafting a survey of active and retired employees to get their feedback on some of the options.
Copies of the presentations can be found online at http://www.ebrschools.org/explore.cfm/infoforretirees/