EBR board to consider health insurance again

The East Baton Rouge Parish School Board on Thursday will vote again on whether to move thousands of Medicare-eligible retirees off the district’s self-funded health insurance plan and have them rely solely on Medicare through a privately managed Medicare Advantage Plan.

The move could save the school system as much as $13 million in 2014, but it is opposed by many retirees who are worried about the consequence of leaving the school system’s insurance group and the uncertain future of Medicare.

After voting May 2 to put off the move for two weeks, the board held more informational sessions May 9 led by Mercer, the health care consulting firm for the school system. They also included representatives from Humana and United Healthcare, the top contenders of 25 companies that have applied to manage a Medicare Advantage plan for the system.

The School Board meets at 5 p.m. at the School Board Office, 1050 S. Foster Drive.

Medicare-eligible retirees, who are expected to number almost 2,900 in 2014, use Medicare for their primary insurance, but most rely on the school system’s group plan, administered by Blue Cross and Blue Shield of Louisiana, for their supplemental insurance, including prescription drug coverage.

Superintendent Bernard Taylor has been pushing to shift those retirees completely to Medicare as a way of saving money and protecting active employees from higher premiums. Last year, the School Board rejected a similar proposal Taylor championed and instead raised rates on all employees, reserving greater increases for retirees.

Mercer is projecting the school system will come up $6.6 million short in 2014 unless it either pumps more money in from its general operating fund, which is already facing cuts, or raises contributions from employees. The Medicare Advantage proposals aim to avoid the former and limit the latter.

United Healthcare is offering a Medicare Advantage plan that would cost $7.4 million in 2014, while Humana has pitched one that would cost $12.9 million.

That’s a savings of $13 million and $7.6 million compared with the $20.5 million the school system is projecting spending in 2014 for Medicare-eligible retirees.

United Healthcare’s plan would decrease premiums for most of these retirees, while Humana’s would increase most of them. Retirees now in the more-generous Buy Up plan would generally pay less, while those in the less-generous Core Plan would generally pay more.

All retirees, though, would pay more if the school system rejects the Medicare Advantage proposal.

Mercer says Medicare-eligible retirees would be about twice what they are now, three times in one category. The projected increases range from $98 to $335 more in 2014, depending on whether the retirees are single or if they have families on the plan.

Retirees who are not Medicare eligible, who number almost 2,000, also could see large premium increases. These range from of 25 percent to nearly 54 percent. That translates to $72 to $185 a year more than they pay now in premiums.

Mercer found that active employees need not see an increase, because their premiums are sufficient to pay their likely medical claims. Rather than differentiating between groups of employees, some retirees are pressing for an across-the-board increase affecting both active and retired employees, similar to what was done last year.