Thursday, May 29, 2014
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Georgia's Latest Teacher Problem: A Lawsuit Over Health Insurance
BY MCCLATCHY NEWS | MAY 23, 2014
By James Salzer
The state is overcharging thousands of teachers, state employees and retirees for their health insurance, according to a class-action lawsuit filed against the Georgia Department of Community Health.
A. Lee Parks, one of the lawyers who filed the suit in Fulton County Superior Court, said the state is overcharging many of the 650,000 members of the State Health Benefit Plan, which has been a political headache for Gov. Nathan Deal and the DCH for almost a year.
Parks estimates that plan members have been paying more than $10 million a month in excess health insurance premiums since the agency made changes in January aimed at placating teachers, employees and retirees. The changes were made after plan members complained that the state was trying to save $200 million a year in part by charging them much higher out-of-pocket costs for health care.
The DCH's changes resulted in lower out-of-pocket costs, but they left some members paying much higher rates while getting the same coverage as members paying much lower premiums.
Those paying the higher premiums still have lower deductibles for their coverage, but they say much of what they pay for standard health care doesn't go toward those deductibles. Some teachers and retirees said they should have been allowed to sign up for the lower-cost plan once the DCH made the coverage fixes in January.
A DCH spokeswoman said the agency does not comment on pending litigation.
The $3 billion-a-year insurance plan has been a hot topic since last summer, when the contract to manage the program for 2014 was awarded to Blue Cross and Blue Shield of Georgia. That prompted one of the companies that had been managing the plan, UnitedHealthcare, to sue the state, arguing that the DCH had resorted to "state-sponsored bid-rigging" to steer the contract to Blue Cross and Blue Shield.
To save money, the state limited the insurance offerings to three plans, with different deductibles and premiums, along with higher out-of-pocket costs.
Once those higher costs started kicking in, teachers, state employees and retirees revolted, forcing Deal and the DCH to backtrack and add back lower co-payments for services, costing more than $100 million.
By doing so, the lawsuit says, the state made all three plans similar. But the premiums didn't change, so those in the highest level plan paid more than twice as much as the lowest-cost plan. The difference for family coverage for an employee runs as high as $279.44 per month, the lawsuit said.
"Their explanation so far is, 'we have the right to change benefits,' " Parks said. "It is kind of like, I want a premium package on my new Ford, and they say it will cost $2,000. You pay the money, but you don't get the package."
News of the lawsuit was posted this week on the Facebook page of the 15,000-member Teachers Rally Against Georgia Insurance Changes, or TRAGIC.
"We are pleased that State Health Benefit Plan members took it upon themselves to initiate a class-action lawsuit regarding the upheaval in our benefits this year," said Ashley Cline, the wife of aCherokee County
"While TRAGIC did not originate the lawsuit, we will certainly communicate important news and information to all of our members as this affects many of us enrolled in the State Health Benefit Plan," she added. "Feedback from TRAGIC members has been very positive so far, and many members are grateful that someone is taking action on their behalf in an attempt to rectify this situation."
Medicaid surge triggers cost concerns for states
Medicaid surge triggers cost concerns for states
By RICARDO ALONSO-ZALDIVAR
WASHINGTON (AP) — From California to Rhode Island
That's likely to revive the debate about how federal decisions can saddle states with unanticipated expenses.
Before President Barack Obama's law expanded Medicaid eligibility, millions of people who were already entitled to its safety-net coverage were not enrolled. Those same people are now signing up in unexpectedly high numbers, partly because of publicity about getting insured under the law.
For states red or blue, the catch is that they must use more of their own money to cover this particular group.
In California
"Our policy goal is to get people covered, so in that sense it's a success," said state legislator Richard Pan, a Democrat who heads the California State Assembly's health committee. "We are going to have to deal with how to support the success."
Online exchanges that offer subsidized private insurance are just one part of the health care law's push to expand coverage. The other part is Medicaid, and it has two components.
First, the law allows states to expand Medicaid eligibility to people with incomes up to 138 percent of the federal poverty line, about $16,100 for an individual. Washington
But whether or not a state expands Medicaid, all states are on the hook for a significantly bigger share of costs when it comes to people who were Medicaid-eligible under previous law. The federal government's share for this group averages about 60 percent nationally. In California
There could be many reasons why people didn't sign up in the past.
They may have simply been unaware. Some may not have needed coverage. Others see a social stigma attached to the program for those with the lowest incomes. But now virtually everyone in the country is required to have coverage or risk fines. That's more motivation to come forward.
"It's not a bad thing that we are opening a door that should have been open before," said Judy Solomon of the Center for Budget and Policy Priorities, which advocates for the poor.
The budget consequences are real.
"Clearly we are going to need to do our best to make sure we are working within the budget we are given," said Deidre Gifford , Rhode Island
States always expected that some previously eligible people would sign up, but Gifford said her state enrolled 5,000 to 6,000 more than it had projected.
In Washington
Governors in California , Rhode Island , and Washington
But researchers also are seeing increased Medicaid enrollment in states that have resisted the health care law.
A recent report from the market research firm Avalere Health found Georgia Montana saw a 10 percent rise and South Carolina Texas
"Anyone who didn't budget for this is going to be behind the eight ball," said Avalere CEO Dan Mendelson. "It's the kind of thing governors will want to discuss with the White House."
When the health care law was being debated in Congress, many states recognized they might face a problem if droves of already-eligible people joined Medicaid. States lobbied federal lawmakers — unsuccessfully — to get more money for that group, said Ray Scheppach, the former top staffer for the National Governors Association.
"States are concerned about this," he said. "It's something they had been worried about right along."
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