A once healthy $500 million in reserve for health insurance coverage on more than a quarter million state employees, school system employees and workers in other agencies has dwindled and it’s the people who pay the premiums who will have to pay the piper.
“A healthy reserve in excess of $500 million is now down to $150 million or less and it’s going down,” Webster Parish Superintendent of Schools Dr. Dan Rawls said. “I’m hearing that by July of 2015, it could be down to around eight million dollars.”
Where has the money gone?
“The governor raided the reserve to balance the budget. Then, he didn’t put up the state’s share of contribution to the Office of Group Benefits (OGB),” Rawls explained. “He said we’ll take the $500 million and pay the state’s share from that and employees will get a break from increases in premiums.”
For two years, employees saw no increases in their health insurance premiums, Rawls said.
Now, the superintendent has good reason to be looking at the OGB figures. He’s working to find the best and most affordable insurance plan for the 650 or so employees of the Webster Parish system and 580 retirees who participate.
“Now, the state’s trying to plug the holes and we have to come up with new plans,” Rawls said. “We have maybe seven or eight to pick from and, in my opinion, none of them are good. What you’re buying here is a major medical policy, nothing more. It’s no longer a Cadillac policy, it’s a lot less.”
When someone sees the premium plan, they may think the cost is down, Rawls said. The major difference, he pointed out, is in the deductible.
“The deductible is out of sight. It is going to be $4,000. Using my plan as an example, the premium is about $320 a month, which doesn’t sound bad. But the deductible will be $4,000. And, after paying all that, the coverage is 80/20 and it’s 50/50 on drugs,” he said. “Those costs can wipe out the average person.”
Rawls said he ran a couple of “what ifs” and the numbers didn’t look good. A procedure that he estimated at roughly $60,000 would cost a participant about $25,000 once premiums, deductible and out-of-pocket expenses were included.
“How many people have that kind of money sitting in the bank?” Rawls asked. “And, our retirees are in the worst shape. They don’t make what they once did, and even though they’re only making a percentage, they still must pay the premiums and deductible just as those who are working.”
Plans should have been the topic of discussion and meetings, Rawls said, but apparently nothing was vetted.
“The OGB people from the state put it together and (Commissioner of Administration) Kristy Nichols said here is your new plan,” he said. “People had sticker shock after they read the new plan.”
Rawls is particularly concerned that the plans are going to carry a hefty price tag for the parish school system.
“The parish has to put up a pool for its employees of $1,000 per year for a single person and $2,000 for an employee and spouse,” he said. “We’re going to be out about $1.2 million a year for the school board’s contribution to the pool. I’m concerned about what we’re going to do. It’s a mess.”
Rawls said he finds it a little ironic that the individuals responsible for presenting the plans won’t be depending on the healthcare coverage they’re suggesting for 230,000 employees.
“I notice none of the legislators are in this plan, nor are the people who developed the plan,” he said. “They are in another plan. It’s sort of like Congress and Obamacare. If it’s good enough for us it should be good enough for everyone.”
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