Thursday, August 14

Thursday, August 14

Rhetoric vs reality on state employee health plan; The rent is too high; History shows college investment pays dividends; "Louisiana Talks Poverty" tonight at LSU; Number of the Day.

Rhetoric on state health insurance doesn’t match reality
Writing in LaPolitics, Commissioner of Administration Kristy Nichols has a new justification for the administration’s regrettable decision to raid a reserve fund in the state employee health plan to finance other spending priorities. Nichols, the governor’s chief budget officer, says the fund’s $540 million balance was simply too large. “If the fund is too high, your money sits idly and doesn’t work for you,” Nichols wrote. Now that the account has been mostly drained, the state Office of Group Benefits that she oversees is “making changes that allow it to provide better service and care to its members in a changing health care environment.”

Left out of the commissioner’s commentary is how these “changes” and “better service” will affect the 230,000 state workers, retirees and their dependents who depend on the OGB for their health care. For that we must turn to the Legislative Fiscal Office, which took an in-depth look at the situation in the latest issue of “Focus on the Fisc.”

As the LFO notes, OGB has been running a $16 million a month deficit. To close the gap, plans are in the works to shift costs onto plan members by jacking up premiums 11 percent this year, raising some co-pays as much as 100 percent and increasing out of pocket maximums, all while cutting benefits. These changes will “save” almost $114 million next year. And by “save” they really mean “shift costs on to state workers, retirees and their dependents.

The LFO says out-of-pocket expenses for a single employee will climb by 47 percent, from $3,533 a year to $5,187. While many state workers recently received their first pay raise in years, changes to their health insurance are may well wipe out that bump.

The rent is too high
Nearly 45 percent of Louisianans who rent spend more than 35 percent of their monthly income on housing, reports the Advocate. According to a new housing assessment study from LSU professors Jim Richardson and Roy Heidelberg done for the Louisiana Housing Corporation, the share of renters who are “rent stressed” has increased 50 percent since 2000. Only 22 percent of Louisiana homeowners with mortgages, by comparison, spend that share of their income on housing each month. The national rates are 43 percent and 26 percent, respectively. Most families who suffer from “rent stress,” not surprisingly, are low-income.

Richardson and Heidelberg also note that areas with a spurt of economic activity often see housing shortages and spikes in rent that can displace long-time residents, suggesting that housing affordability could become a serious concern in parts of the state like Lake Charles where industrial construction activity is increasing.

History shows college investments pay dividends
In an era of frequent hostility toward the government, the Advocate’s editorial board took time to remind readers of a success stories: the GI Bill, which helped veterans returning from World War II go to college. Beyond providing direct benefits to veterans, the editorial notes, the GI Bill made America’s workforce the most educated and productive in the world and helped reshape entire communities: “The prevailing lesson of the GI Bill is that affordable education and job training help not only the direct recipients, but the broader national economy.” At a time when higher education is increasingly out of reach for more and more Americans and job training programs are woefully inadequate to meet the demand for skilled labor, this is a lesson that policymakers should take to heart. Unfortunately, as the editorial laments, “It’s a lesson, sadly, that too many of today’s leaders forget.”

Louisiana Talks Poverty tonight at LSU
Louisiana Progress and LSU’s African American Cultural Center are gathering Baton Rouge-area representatives tonight for Louisiana Talks Poverty, a public discussion about strategies to help lift Louisiana families and children above the poverty line. The conversation is important as nearly one in five Louisianans live in poverty, the third-highest rate in the nation. That includes more than 300,000 children. Guest panelists include State Rep. Ted James, EBR Metro Councilmembers Ronnie Edwards and Chauna Banks-Daniel, LBP Poverty to Opportunity Project Coordinator David Gray, Catholic Charities Executive Director David Aguillard, and Louisiana Progress Director of Research and Policy Carrie Wooten. The conversation starts at 7 at the LSU African American Student Cultural Center in Baton Rouge. You can follow the conversation on Twitter using the hashtag #LaTweetsPoverty.


Number of the Day

$114 million—Costs that will be shifted to state workers and retirees next year due to changes in the state’s health insurance plan (Source: Legislative Fiscal Office)