Retiree Medicare proposal deadlocks
By Charles Lussier
Advocate staff writer
August 03, 2012
After almost six hours of debate late Thursday night, the East Baton Rouge Parish School Board deadlocked over a controversial proposal to cancel supplemental medical insurance for almost 2,700 retired employees and move them to Medicare.
The 11-member board also could not agree on an alternative.
Instead, the board was debating whether to return in August for the fifth time and try to come up with a way to close a looming $6 million shortfall in employee medical coverage.
If no other changes are made, premiums for all 10,000 active and retired employees would increase about 33 percent.
Any changes would take effect Jan. 1.
The vote on the proposed Medicare shifted failed in a 5-4 vote. The motion needed six votes to pass.
A “for” vote is in favor of the shift.
Voting for the shift were board members Craig Freeman, Vereta Lee, Kenyetta Nelson-Smith, Tarvald Smith and Evelyn Ware-Jackson.
Voting against the shift were board members Jerry Arbour, Connie Bernard, Jill Dyason and Randy Lamana.
Board members Barbara Freiberg and David Tatman were absent Thursday.
The debate was similar to one the board had July 9 when it voted 8-1 to hold off on the Medicare shift, saying there was not enough time to explain to concerned retirees what the change would entail.
Superintendent Bernard Taylor, who was out of town July 9, asked the board to reverse itself and approve the Medicare transfer proposal, which would save the school system about $8.7 million a year.
In advance of Thursday’s meeting, Taylor had four informational sessions in three days to explain the proposed change to the district’s active and retired employees.
Taylor said Thursday the School Board recently approved $28 million in budget cuts, and has more cuts coming in the future. At one point, he described the school system as “teetering on bankruptcy.”
“We are holding out a false promise when we tell people we can continue to do what we’ve been doing when there are not the resources there to do it,” Taylor told the board Thursday.
Taylor acknowledged the change is not ideal.
“It is a sacrifice we ask some to make so that all can benefit,” he said.
Arbour pushed unsuccessfully for an alternative that would raise premiums just 16 percent, and also revive a previously rejected proposal to lower life insurance coverage for employees, a move that would save another $1 million.
Arbour acknowledged his alternative would leave the school system with at least $2 million in cuts still to find.
He said there’s already a possibility of mid-year budget cuts depending on how many students opt to transfer from Baton Rouge schools.
“We will make our job more difficult,” Arbour said. “We will have to find an additional $2 million.”
Freeman spoke most forcefully in favor of the Medicare shift and against Arbour’s alternative.
“We can’t handcuff the superintendent to tell him to cut $2 million and at the same time open new schools,” Freeman said.
Arbour’s motion failed in a 5-4 vote. It also needed six votes to pass.
R. Richard Raether, a retiree and former finance director for the school system, said the future of Medicare is too uncertain at present to push people into their supplemental coverage.
“It is not the time to make such a huge change,” Raether said.
Elizabeth Butler, a retired head cook from Melrose Elementary, could not stand and sat in a chair as she addressed the board.
“I’m 88 years old and to jump into something new, I’m going to tell you, I’m scared,” Butler said.
Extend Health, the San Mateo, Calif., private company that would oversee the shift to Medicare, had previously set a deadline of July 9 for the school system to approve the change but postponed the deadline until Thursday after Taylor pushed for more time.
Under the change, which Extend Health would oversee, Medicare-eligible retirees would have a special health retirement account in their name with $3,281 placed inside each year. With that money, employees could sign up for one of three basic programs: Medicare Advantage, Medicare Advantage Fee for Service, and Medigap Plan F.
Pamela Workman, a senior benefits consultant with Extend Health, said most retirees would come out well if they shifted their supplemental coverage to Medicare.
She gave a scenario in which a retiree signs up for a generous “Cadillac plan” and still has $800 left over. That money could be rolled over into future years, and the retirees would no longer have to pay premiums out of their paycheck as they do now.
“To me I’m confused as to why there’s so much of an uproar on the School Board,” Workman said.
Dyason said she was torn, saying there are things she liked about the Medicare shift, but such changes need more time to be presented and explained.
She said the Medicare shift is likely to be re-proposed to the board in the spring.
“This is not going to get any better next year,” Dyason said. “It’s going to get worse.”
The school system is posting information about the issue online at http://news.ebrschools.org/explore.cfm/2013healthcare/