Gov. Bobby Jindal got the blame Monday for higher premiums and out-of-pocket expenses coming for nearly 230,000 state employees, teachers, retirees and their dependents enrolled in state Group Benefits.
Speakers during a public hearing on the insurance program benefit changes claimed mismanagement emanating from Jindal’s office led to what several deemed a “fiasco.”
The hearing brought a sparse crowd, which some of the three dozen attendees blamed on the holiday timing and a feeling that they can do nothing to stop what is being thrust upon them.
Group Benefits members had to make a choice among a variety of new insurance plans by Dec. 7. The legally required public hearing to implement the new benefits plans came 22 days later.
“This thing is set in stone,” retiree Ray Clement said. “Carry a message to the man upstairs. ... His capricious and unethical attitude toward the process is a slap in the face to every honest, hard-working individual in the state of Louisiana.”
Retiree Calvin Fair said, “These decisions have been made a long time ago without any input.”
Group Benefits was working well with a $500 million surplus a little more than two years ago, said Fair — one of nine people who testified. Then, Jindal orchestrated changes “to destroy that,” Fair said. “I wish the Legislature had stood up to him.”
On Monday, the Legislative Auditor’s Office issued a report that said the Jindal administration’s decisions to reduce insurance premiums contributed to the $500 million reserve fund declining to $207 million within two years.
The auditor said the premium cut came as medical and drug costs were increasing at a rate of 5 percent to 8 percent a year. State government and school systems generally pay 75 percent of the premium costs, so any reduction relieved budget pressure and dollars could be spent elsewhere.
“It’s bad management by the leadership of this state,” Fair said.
The administration pursued the overhaul of the insurance plan offerings to help shore up Group Benefits’ finances. In response to heavy opposition, the administration about a month ago revamped its original plan, relieving some of the financial stress on retirees and, to a lesser extent, on active employees. A new level of coverage was added to all plans that will allow individuals with one dependent, either a child or a spouse, to pay a lower deductible and out-of-pocket maximum than families. The revamped plan reduced out-of-pocket expenses in exchange for higher premiums. Premiums could go up nearly 11 percent beginning July 1.
Jindal spokesman Mike Reed issued a statement that said, in part, that Group Benefits “has been negatively impacted by Obamacare and the rising cost of health care. That’s why we had to make some changes ... to maintain a fiscally responsible program and ensure members have access to the services they need.”
After the meeting, Group Benefits Chief Executive Officer Susan West issued a prepared statement in response to the complaints.
“While rising costs have made changes to health care unavoidable, we have taken the feedback of our members very seriously throughout this process. We worked with legislators and members to update the proposed 2015 plans in November to address the majority of the concerns of state employees and retirees,” West said.
Many of the changes came as a result of input received from Group Benefits enrollees and legislators during a series of meetings on the original proposal, she said.
The public hearing was scheduled to solicit comments on the specific plan changes. The legislative committees with Group Benefits oversight also can conduct a hearing. But none so far has been scheduled.
As criticism of Jindal rained down, West reminded speakers of the purpose of the hearing.
“Stay on point with the notice of intent,” West said.
But West’s caution did not stop speakers who, with one exception, continued to vent their frustration in general over what has happened.
“Everything has been thrown at us,” said Dianne Guillot, president of the Retired State Employees Association.
Guillot said retirees got some relief when the administration revised the original plan. “In the same process, we left the active people hanging on a limb,” she said, referring to higher costs active employees will pay.
RSEA Executive Director Frank Jobert said retirees got a break because many live on fixed incomes. But he said active employees are in the same boat, going without pay raises for years and no pay raises likely in 2015 or 2016 because of the budget situation, including a projected $1.4 billion shortfall for the financial year that begins on July 1.
He said depletion of Group Benefits reserves was “clearly mismanagement — not on the part of the staff but the (Jindal) administration.”
“Once again, Jindal has destroyed what was working well,” retiree Vicki Picou said. “Today’s hearing is indeed a charade.”
Retiree Stan Hurder complained that the changes set up a “two-tiered” system. “You need to go back to the drawing board and provide equal coverage for everybody.”
Hurder said the Legislature should reimburse Group Benefits for the dollars lost from the reserve fund because of administrative actions.
The only favorable comment came from Louisiana Retired Teachers’ Association Executive Director Graig Luscomb. He said concerns of retired teachers are “satisfactorily” addressed in the new plan changes.