School Board puts off Medicare shift after concerns raised
Retired employees packed the East Baton Rouge Parish School Board Office on Monday, opposing a plan to no longer offer supplemental health insurance to almost 2,700 retired employees and instead move them all to Medicare.
Confusion and fear over the change among retirees prompted the board to vote 8-1 to postpone the Medicare shift and instead urged the consulting group that oversees medical spending to come up with a new option a month from now.
Board members Connie Bernard, Tarvald Smith, David Tatman, Ray Lamana, Jerry Arbour, Barbara Freiberg, Kenyatta Nelson-Smith and Vereta Lee voted for the postponement.
Board member Evelyn Ware-Jackson voted “no.” Board member Jill Dyason did not vote, and board member Craig Freeman was absent.
Ware-Jackson, Dyason and Bernard earlier suggested trying out the shift to Medicare for a short period as a pilot to see how it worked, but were voted down in a 3-7 vote.
In not shifting to Medicare, the board is foregoing, for likely another year, an estimated $.8.7 million in annual savings. Instead, the school system’s almost 10,000 active and retired employees will have to pay more to cover a looming shortfall of $6.2 million in 2013.
Lee Faucette, with the Baton Rouge Area Retired Teachers Association, said the retirees he talks to prefer paying more.
“The ones I talk to would be willing to pay more money and more in premiums to stay in the group we’re in and not be out on our own,” Faucette said.
Mary Morrison, representing Mercer Human Resources Consulting Group, said Monday night was the deadline for the school system to hire San Mateo, Calif.-based Extend Health to manage a shift to Medicare.
“Extend has been very firm with me,” Morrison said.
Echoing other School Board members, Dyason said the board needs more time to show employees the benefits of the proposed shift. She said she did not understand the board’s regular July 19 meeting would be too late.
“I’m thinking come on, if you do it in 5½ months, but you can’t do it in six?” Dyason said.
Morrison said companies like Extend Health want six months at a minimum to transition employees to Medicare.
R. Richard Raether, a retiree and former finance director for the School Board, said in 1972 the school system agreed to a “covenant” in which retirees get the same insurance coverage as active employees and the proposed shift to Medicare breaks faith with that covenant.
Raether said the changes in Medicare scare him and other retirees.
“This would remove control of our medical coverage from Baton Rouge and send it to Washington,” Raether said.
Reese Patterson, a retiree, made a similar point.
“I don’t believe my doctor will go with this if they continue to cut Medicare,” he said.
Mercer came up with the shift to Medicare as an alternative to raising premiums across the board to cover the estimated $6.2 million shortfall in 2013 in the school system medical insurance plan. If premium increases covered the shortfall, premiums would go up from $22 to $560 a month, depending on the employee, the number of dependents and the plan enrolled in.
Board member Jerry Arbour urged Mercer to come up with another option that would make changes to areas besides premiums.
Morrison said she would likely recommend consolidating the school system’s two main plans, the Core and the more generous Buy Up plans, into just one plan, raising deductibles by $500 and raising maximum out-of-pocket costs by $2,000.
Mercer’s presentation and additional information is online: http://schoolboard.ebrschools.org/eduWEB2/1000145/docs/asp07.09.12linked.pdf
Other items discussed during the meeting included:
GIFTED EXPANSION: In other action, the School Board agreed in a 9-0 vote to expand the gifted program at Wildwood Elementary, 444 Halfway Tree Road.
Board member Nelson-Smith abstained and Freeman was absent.
Some board members suggested putting off implementation until the 2013-14 school year to save costs and have more time to recruit students.
Wildwood is one of 16 elementary schools in the System that offers gifted services, but only four schools offer both gifted and talented services that employ self-contained classes as opposed to less expensive resource or “pull-out” style instruction.
Wildwood has 21 gifted students receiving resource instruction. Last year, the school’s official enrollment was 544 students.
In a letter to the School Board Friday, new Superintendent Bernard Taylor suggested offering self-contained gifted services just to kindergartners and first-graders in 2012-13 to keep costs down, if enough newly identified gifted children sign up, and expand to more grades in the future.
The school year starts Aug. 9.