The East Baton Rouge Parish School Board voted late Thursday to give thousands of Medicare-eligible retirees the choice of staying on the district’s self-funded health insurance plan or shifting completely to Medicare through a Medicare Advantage Plan managed by Humana.
The shift will occur in January. Retirees can stay on the school system’s group insurance if they pay higher premiums than they currently pay. The School Board plans to revisit the issue a year from now.
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 supplemental insurance, including prescription drug coverage.
Superintendent Bernard Taylor had asked for a chance to negotiate a “best and final offer” with either Humana or United Healthcare, the two companies vying to run the plan.
But board member Jill Dyason suggested the best option was hiring Humana, to specify that there be no copays for retirees and that the retirees be given a choice of paying higher premiums to continue in the Blue Cross group.
Dyason’s complex motion won in a 6-5 vote.
Board members voting with Dyason in favor of the motion were Jerry Arbour, Connie Bernard, Barbara Freiberg, Randy Lamana and Vereta Lee.
Those voting against were Craig Freeman, Kenyetta Nelson-Smith, Tarvald Smith, David Tatman and Evelyn Ware-Jackson.
The board also voted to increase premiums for nearly 2,000 non-Medicare retirees who could see premium increases ranging from 25 percent to nearly 54 percent. That translates to $72 to $185 a year more than they pay now in premiums.
Active employees’ premiums will be unchanged.
The shift to Medicare will save the school system millions, but it has been opposed by many retirees worried about the consequence of leaving the school system’s insurance group and the uncertain future of Medicare. The issue has bedeviled the school system for the past year.
Thursday’s debate centered less on whether to enter a Medicare Advantage plan and more on how to structure it. The options included whether require a copay or not — many Medicare-eligible retirees don’t pay a copay now— and whether retirees could have the choice to stay on the school system’s group insurance.
“We asked to have something closest to what we actually have,” said Carnell Washington, president of the East Baton Rouge Parish Federation of Teachers.
Board members threw up an array of alternatives, leaving Taylor confused at times.
“I’m so totally lost here, and I don’t know what we’re doing,” Taylor said at one point. “Can you give me direction as to whether we can save anything here.”
School Board member Tarvald Smith suggested letting Taylor negotiate the best deal he can and come back to the board later.
“Either we’re going to authorize the superintendent to enter into something or not,” Smith said.
Mercer, the school system’s health care consulting firm, that is projecting the school system will come up $6.6 million short in 2014 unless it either pumps in more money 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.
John Byars, a retired teacher, said that custodians and other low-paid school workers are not being considered enough in this discussion.
“I’ve seen too many instances where these folks, who the schools could not operate without, are left out,” he said. “They can’t afford these increases.”