How much will the OGB insurance plans really cost?
The new medical insurance rates imposed by the Office of Group Benefits on our state workers, teachers and retirees are of great concern.
However, it’s not just the dramatic economic burden on its members’ family budgets that should bother us. In addition, we should be concerned that the present cost changes may NOT be based on sound actuarial valuations but simply are guesstimates by the commissioner of administration and OGB.
If one goes to the OGB website, you will notice that a Request for Proposals (RFP) is being lent for actuarial services beginning Jan. 1, 2015, and ending Dec. 31, 2015, to evaluate the cost liabilities of the OGB medical plans.
For those not familiar with the term “actuarial valuation,” it’s basically a type of report which serves as a guide to companies in making economic and demographic assumptions in order to estimate future liabilities. In the case of OGB, this report would give guidance as to whether the new cost increases are sufficient to allow the plans to be self-sustaining.
Apparently, from the recent RFP, it appears OGB is going to monitor their costs during plan implementation, and this is good standard business practice. It is for one year with the option to renew with the same company for two additional years.
What should concern us is that no such RFP for actuarial services for evaluating the feasibility of the new OGB cost changes before they were implemented can be found. I have contacted Susan West, CEO of OGB, requesting this information, but have, to date, received no response. When I made other informational requests, I received an immediate response.
The deafening silence surrounding this request leads me to believe that perhaps no such analysis was done. Therefore, OGB is hoping that the cost increases will be adequate because there appears to be no reliable supportive cost projection data.
My major concern is if the actuarial valuations beginning Jan. 1 indicate that OGB erred in their guesstimates and underestimated, state workers, teachers and retirees will be saddled with yet another increase in their health care costs midway through next year.
And remember, OGB monthly premiums will never rise, because that would mean a greater cost burden for the state.
Instead, OGB could just keep increasing “out-of-pocket,” “deductibles” and the number of “required authorization” procedures until “they get it right.”
As more and more information slowly becomes apparent surrounding the entire OGB situation, beginning with the decision to lower insurance premiums by 8 percent for two years, one is forced to question the competence of those Jindal appointees involved with it. From Jindal’s point of view, they are probably considered most competent because they dutifully carry out his unconscionable deeds. However, from an unbiased, good business practice model, they flunk the test.
However, the only thing that is certain about the OGB insurance plans is that its members will continue to remain in the dark about how much to budget for their health insurance costs.