During the last few weeks, there has been a lot of interest in the Office of Group Benefits (OGB), which manages health insurance for state employees, and the changes its members will see in their 2015 plans. Much of the information reported has been inaccurate and has caused unnecessary confusion. Premium rates are not increasing. The changes to the 2015 plans will make OGB’s plans look more like the dynamic, quality plans that are typical in the private sector and offered by Blue Cross Blue Shield to its customers. This new managed care method will coordinate services toward improving health outcomes while controlling costs for taxpayers.
As we near the annual enrollment period, all OGB members will receive more information about 2015 plans in the mail, and are invited to attend any of the 41 meetings and 7 webinars around the state.
In the meantime, I’d like to set the record straight on some of the most prevalent myths that have been reported:
Myth: Premium rates are increasing in January.
Reality: Premium rates are not increasing this January. In fact, two of OGB’s plans will offer members premiums far lower than those offered today at $57 and $98 per month.
Myth: OGB is getting rid of its current plans.
Reality: OGB will still offer HMO, PPO and consumer-driven health plans in 2015. Retirees will still be able to choose from OGB secondary plans (HMO, PPO and CDHP) as well as Medicare Advantage plans. We have also added brand new plan types that we believe will meet the needs of many of our members. OGB’s website and customer service department will provide information on which of the new plans are comparable to the current plans.
Myth: The average OGB member will pay 47 percent more in out-of-pocket costs.
Reality: Many members will actually see a reduction in out-of-pocket costs thanks to employer contributions in the HRA and HSA plans. While out-of-pocket maximums are increasing in 2015, that change will not affect most OGB members. Less than three percent of members enrolled in the HMO plan reached their out-of-pocket max in 2013. The average member enrolled in an employee-only plan only paid $250 out-of-pocket last year, while the average family paid $466, far below the current and future maximums.
Myth: OGB’s fund balance will be at zero at the end of the fiscal year.
Reality: OGB’s actuary predicts that OGB will have a $118 million fund balance and a $243 million cash balance at the end of FY15. That number is within OGB’s target range for a healthy balance and is entirely appropriate for a plan of OGB’s size.
Myth: The 2015 plan changes are related to the third-party administrator contact with Blue Cross and Blue Shield of Louisiana.
Reality: OGB’s contract with Blue Cross has actually saved the state and OGB members money by reducing administrative costs. However, OGB has been negatively impacted by “Obamacare” and the rising cost of health care. In fact, “Obamacare” will cost the state $24 million each year. That accounts for nearly half of the five percent premium increase that went into effect in July. Despite rising costs, a recent study of state health plans showed that Louisiana’s premiums are 15 percent lower than the national average.
The changes to the 2015 plans will make OGB’s plans look more like the quality plans that are typical in the private sector and offered by Blue Cross Blue Shield to its other customers. For example, in the private sector, it is unheard of to have an HMO with no prior authorization. This new managed care method will coordinate services toward improving health outcomes and controlling cost for taxpayers.
Kristy Nichols is Louisiana’s commissioner of administration.