Can someone explain this group benefits situation

The way it was told to me, it sounded as if they were taking money out of the pension reserve fund. I did hear about health insurance premium hikes but this was made to sound like something different.

Its not really about increasing costs. Everyone accepts that costs increase.

The scandal, if you will, is in mis-handling of funds and corrupt contracts/contract fixing.

Similar to the CNSI scandal. They privatized it, and supposedly rigged up a special RFP for a company called Vantage and also some prescription company called MedImpact. The Jindal administration also blatantly circumvented legislative oversight and gave out multi-million dollar no-bid contracts to handle the incoming calls.. just months after laying off people. Could have saved a lot of money by waiting. Seems odd that they chose a company that was not prepared, as well. They evoked emergency protocols to get all this done and yet they've been planning this for over a year.

The Jindal administration is handling it very cleverly by obfuscating the real issue. They want everyone to chalk it up to rising healthcare costs/obamacare, when in reality there's much more going on behind the scenes.

They basically told state workers they could keep their plans. Then turned around canceled the plans and told them you have one month to pick a new plan.

All the plans triple the deductible and out of pocket limit.

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They basically told state workers they could keep their plans. Then turned around canceled the plans and told them you have one month to pick a new plan. All the plans triple the deductible and out of pocket limit.

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And? I'm sure thousands of private employers said the same thing until realizing the costs associated with keeping the same plans.

Btw, the dude that started the thread on the OT bitching about increases said he was previously paying $370/mo for a family of four... That's dirt fricking cheap

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They basically told state workers they could keep their plans. Then turned around canceled the plans and told them you have one month to pick a new plan.

All the plans triple the deductible and out of pocket limit.

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So if they liked their plan they could keep it?

Sow, reap, this is gold.

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Btw, the dude that started the thread on the OT bitching about increases said he was previously paying $370/mo for a family of four... That's dirt fricking cheap

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I have to wonder about that number. I have the HMO and pay $140.28/month. I'm not the type to get sick often nor need serious medical treatment so this is a good deal for me. Adding my wife on it though, that increases the monthly amount to about $450. He may be on a different plan, or maybe he was just counting his kids (which, strangely enough, is much less expensive than adding a spouse).

The issue is Jindal had OGB falsely keep premiums low. This meant OGB had to dip into its reserves to cover the difference instead of it coming from employees or the budget. Normally this is fine, except Jindal had them drain the fund well below what their actuaries recommended so now the employees are being hit harder than they would have had he just left it alone.

Jindal didn't do this out of any sense of fiscal duty, he did it because he's been trying to privatize OGB for a while now so he can try to write off the state's UAL and claim it as "balancing the budget".

Did you just imply the work ethic of state workers is better than private workers?

Dude.

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Our company pays 90% of the cost of our HMO plan and it includes dental and vision.

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I don't believe you because everyone knows that state workers get fabulous benefits that need to be cut.


/sarcasm

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Neither will legislators, the governor, or his mother. Legislators and bobby's mother are on LSU's plan which is unaffected by all this.

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There's been talk that everyone may end up moving to the LSU plan.

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Its not really about increasing costs. Everyone accepts that costs increase.

The scandal, if you will, is in mis-handling of funds and corrupt contracts/contract fixing.

Similar to the CNSI scandal. They privatized it, and supposedly rigged up a special RFP for a company called Vantage and also some prescription company called MedImpact. The Jindal administration also blatantly circumvented legislative oversight and gave out multi-million dollar no-bid contracts to handle the incoming calls.. just months after laying off people. Could have saved a lot of money by waiting. Seems odd that they chose a company that was not prepared, as well. They evoked emergency protocols to get all this done and yet they've been planning this for over a year.

The Jindal administration is handling it very cleverly by obfuscating the real issue. They want everyone to chalk it up to rising healthcare costs/obamacare, when in reality there's much more going on behind the scenes.

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Um, you are confusing several issues.

1. You mention the privatization. This has nothing to do with the privatization.

2. Vantage and MedImpact. No, there was no rigged up RFP.

3. No bid- call centers: not sure of the details on this one. But regardless, it's not at the heart of the matter.

4.

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The Jindal administration is handling it very cleverly by obfuscating the real issue. They want everyone to chalk it up to rising healthcare costs/obamacare, when in reality there's much more going on behind the scenes.

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That is pretty much what you just did.


The core of the issue is the Office of Group Benefits (OGB), the state's health insurance program for employees, had a $500 million balance in their reserve fund. Instead of increasing premiums two years ago to keep up with medical costs, they cut premiums to eat into the fund balance. (It's a matter of opinion on whether this was too much for a reserve fund or not.) This meant a reduction in how much employees/retirees had to pay, but since costs are generally split 25/75%, employers (state agencies and school boards) saved even more. With the premiums agencies had to pay reduced, it made it easier to balance the budget.

Of course, you can see that is an unsustainable path. At some point, premiums have to rise, not only to cover the increased cost of healthcare, but also to stop the draining of the fund.

However, instead of increasing premiums (beyond the 5% they increased for the current year) they made the plans less costly (ie lowered benefits) through a variety of means like increasing deductibles and copays. The reason for that is 75% of any premium increase would be borne by state agencies (and affect the budget), but benefit decreases fall 100% on the employee.

So that is crux of the matter.