Friday, June 18, 2010

Benge Again Hits Henry On SB2052 Veto, Cites Multi-Million Dollar Cost To State Agencies

Governor Henry's veto of Senate Bill 2052 continues to reverberate today as whispers about why he did it gain traction.

Adding fuel to the fire today is House Speaker Chris Benge, who issued a news release saying the veto is costing state employees and their agencies millions of dollars.

Henry's veto, some claim, benefits Dr. John Bell, son of Norman attorney Richard Bell, one of Henry's earliest and most generous supporters. Dr. Bell is connected to GlobalHealth, now a provider of an HMO health insurance plan. Henry appointed Dr. Bell to the OU Board of Regents in 2003. Richard Bell heads the Sarkey's Foundation in Norman, which employs First Lady Kim Henry as executive director.

Governor Henry's office countered Benge's criticism, replying through Communications Director Paul Sund.

In his release, Benge said, "Numerous agencies, including some of the state’s largest, were set to save millions from legislation that would have streamlined state and education employee health insurance in an effort to lower costs for both the state and workers.

"Unfortunately, a veto of that legislation has left many agencies—who built those anticipated savings into their fiscal year 2011 budgets—looking for ways to fill those holes. The veto also leaves state agencies, school districts and other entities that use HealthChoice insurance plans possibly facing as much as $75 million in premium increases if current trends continue.

"Senate Bill 2052, by House Speaker Chris Benge and Senate President Pro Tempore Glenn Coffee, would have consolidated the Oklahoma State and Education Employees Group Insurance Board and the Oklahoma Employees Benefits Council into one entity called the Oklahoma Health and Wellness Board.

"The legislation would have also required a competitive and winner-take-all bidding process for a statewide HMO for state employees, in addition to current PPO insurance offerings. This change would have worked to lower the cost of an HMO plan for state employees through volume purchasing and decreased administrative costs, and would have in turn brought the state employee benefit allowance more in line with actual health insurance costs.

"So as to not negatively impact existing state employees, the state employee benefit allowance was frozen by the legislation, and would have been indexed to the cost of the basic HealthChoice insurance plan.

"Many state agencies were set to realize millions in savings as a result of the bill, including the Department of Human Services and the Department of Corrections.

"According to staff at the Department of Human Services, their agency had factored in $1.2 million in savings into the FY11 budget that will now have to be filled from other sources because of the veto.

"The Department of Corrections stood to save $3.7 million if the bill had been signed into law.

"Currently, the benefit allowance is calculated based on an average of all the current insurance plan offerings, including two HealthChoice options and multiple HMO plans.

"Though the majority of state employees select one of the HealthChoice plans, the more-expensive HMO plans drive up the benefit allowance to a level often above the actual cost of the employee’s health insurance costs.

"The average premium increase for a family on HealthChoice has been 10 percent annually over the last eight years. The average benefit allowance increase has been 12 percent annually over the last eight years, which is the portion paid by state agencies. In 2007, the premium increase for a family on HealthChoice was 20 percent and the benefit allowance increased 23 percent.

"A veto of the bill means that state agencies, school districts and all other entities that use HealthChoice, based on the last eight year trend, could see premium increases of nearly $75 million.

"Based on the current rate of growth in the benefit allowance, the total paid by state agencies is expected to be about $43 million for 2011 because of the veto of SB 2052.

"The bill was vetoed last week with a claim that the reforms were not 'thoroughly researched and debated throughout the four-month session with all stakeholders at the table.'

"Last year, Benge and Coffee created the State Employee Health Insurance Review Working group, which was comprised of a bipartisan group of House and Senate members and the state Insurance Commissioner, Kim Holland. The working group crafted the vetoed legislation based on the recommendations proposed in a report from a national insurance consultant, which was publicly released and sent to the governor last December. Upon the release of the report, the Speaker’s staff also met with the governor’s staff to discuss the report and the potential for legislation.

“This legislation represents common sense reform that was the result of 15 months of cooperative effort. All stakeholders were involved in the crafting of this legislation and many people gave a lot of time and effort to make this happen. The legislation was supported overwhelmingly in the House and Senate and was endorsed by the state and education employees associations,” said Benge, R-Tulsa. “Rejection of this legislation will allow health care costs to continue to spiral out of control for our state, which is a major concern for every agency and state and education employee in this state. It is inaccurate to say that this legislation was not properly vetted.”

"The efforts of the House and Senate working group were thorough, deliberative and inclusive,” said Holland. “Our goal was to maintain competitive benefits for our state and education employees and their families while reducing costs to those employees and to state agencies. We accomplished our goal and I am disappointed by the veto."

"The legislation would have also directed the new board to create a wellness program for state employees and requires the board to spend surplus funds on wellness programs, health savings accounts (HSAs) or flexible spending accounts (FSAs). Utilization of HSAs, FSAs and successful wellness programs have been proven to contain the growth of rapidly increasing health care costs by encouraging personal responsibility and better health outcomes.

"Finally, the bill would have required an annual ongoing savings of 15 percent on administrative overhead and directs the board to eliminate any duplicative positions, services or assets.

“This is a very important issue to state and education employees, as well as all Oklahoma agencies,” said House Speaker-Designate Kris Steele, R-Shawnee. “I intend to study this subject over the interim in preparation for the next legislative session.”

Sund's Reply For Henry
Said Sund on Henry's behalf: “The Speaker’s criticism is disingenuous, particularly his suggestion that the legislation was thoroughly deliberated and discussed by the Legislature. The truth of the matter is the final 289-page version of the bill was kept secret until the final days of session and wasn’t brought to the House and Senate floors until the chaotic last hours before adjournment. Most legislators and stakeholders didn’t have an opportunity to thoroughly review the final bill, much less have any input into it.

“This is the same kind of sausage-making approach to legislation that produced a fatally flawed Medical Examiner’s bill, allegations of legislative impropriety and a grand jury investigation.

“The Speaker’s claim that the veto will cost state agencies millions of dollars is equally dubious. The alleged savings of SB 2052 are unsubstantiated guesswork and opponents of the legislation have raised legitimate concerns that the measure would actually reduce benefits for teachers and state employees and increase state insurance costs by limiting competition.

“The bottom line is this was questionable legislation at best, drafted in secret and rushed through in the final hours of session. Those facts won’t change no matter how many revisionist history news releases are issued.”

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