Where’s the data??

Well it is pretty obvious from Thursday’s legislative public hearing on the changes being implemented by the Office of Group Benefits that we have a new person sitting in the governor’s chair, Kristy Nichols, Commissioner of Administration.  She was the star of the show in attempting to address the reasons for the massive changes in the state insurance plans that are being implemented on the backs of approximately 230,000 state retirees, teachers and workers.   Where was Bobby?

She used all the panic catch words like, “outlook dim”, “changes imperative”, “soon go broke”,  in attempting to justify the present insurance plans that  must be selected by OGB members by October 31^st. 

However, there was something missing from her defense, actuarial valuations. 

An actuarial valuation is a type of report which requires making economic and demographic assumptions in order to estimate future liabilities.

These technical reports provide full disclosure of the financial and funding status of financed agencies.  They are prepared to predict the future financial impact of funding changes proposed for entities.

Insurance companies use them all the time to predict how much money they will need in premiums to offset the cost of claims and still remain profitable. 

I have one question for Ms. Nichols.  Where were the actuarial reports showing what the impact was going to be on the OGB state insurance plans when Jindal implemented his across-the-board 8% premium reduction for 2 years?

They apparently did one for the state budget impact, because Jindal’s minions figured out how much  money the state would save by the reduction in premiums.   This would occur because the state pays up to 75% of retirees’ health premiums, and if you reduce them, the state has to come up with less money; thus the purported savings. 

Jindal and Nichols are not stupid individuals.  The lack of these reports was not due to incompetence or oversight.  They simply didn’t care what happened to the insurance plans.  Their only concern was for a balanced state budget proposal.  

After implementation of the 8% premium reduction, the insurance plans started going south due to a failure of not enough premium monies to offset the insurance medical claims costs.   Jindal’s crew panicked and immediately implemented an across-the-board 5% premium increase.   

However that still left them 3% short of putting things back to the original levels.  But remember, each percent of premium increase would cost the state more money and Bobby’s servants wanted to protect the state budget which was already operating at a loss. 

So while Nichols goes on and on about the poor health of the retirees and rising insurance cost due to Obamacare,  I’m pretty confident that, if the Jindal administration had approached the OGB insurance problem from an actuarial valuation of the insurance plans AND the state budget, some truly workable solution could have been found that would not devastate those OGB retirees on a fixed income. 

Some have claimed that the ultimate goal of the Jindal administration is to force everyone out of the state insurance plans, thus saving the state big bucks.

After all he can’t cut education and medical services anymore and survive in his bid for a presidential nod.  And he certainly can’t raise taxes and survive.  Consequently, he must find other creative ways to balance the state budget.  

I would like to see Bobby and Nichols submit an actuarial valuation which focuses on utilizing the original OGB premiums rates BEFORE Bobby's rollback coupled with the implementation of an across-the-board 5% premium increase.  I bet no additional changes would have to be made to any of the present plans.