I spoke to a knowledgeable ERS retiree today. Here is what I was told:
1. When you retire, you have one chance to choose a health plan. This retiree chose Blue Cross. Then, this summer, all retirees received a notice. It said that all retirees would be moved to Humana. If you wanted to remain with Blue Cross, you had to opt out of Humana. You were in Humana unless you opted out.
2. All this was happening while United was in negotiations with ERS at the same time as Humana had been negotiating.
3. Lots of retirees opted out of Humana, not knowing that they would lose Blue Cross anyway because United was going to get the contract.
4. The contract with UnitedHealthcare would not be so shocking if we (retirees) hadn’t been pushed to take Humana. It was hard to opt out; the window to do so was very small.
5. From a business standpoint, if Humana was going to get a lot of retirees, what was going to be left over for United?
6. Kenneth Schine, the Executive Vice Chancellor for Health Affairs at UT, is on the board of directors for United. Is this a conflict of interest?
7. Watch for Seton to develop its own healthcare plan that will feed patients for the new UT medical school. Another potential conflict, or just a partnership?
I don’t know that there are any giant conclusions to draw from this information, but it is peculiar that ERS appears to have been negotiating with both Humana and United at the same time.
Readers are probably aware that Speaker Straus has included the ERS contract on the list of interim charges. The text of the charge to the State Affairs committee:
“Study how businesses seeking to provide goods or services to the state interact with state agencies. Consider whether additional procedures are needed to ensure that goods and services obtained by the state are the best value. Determine whether additional disclosure and reporting requirements are necessary to ensure transparency, accountability, and to promote ethical business practices.”
The interim charge is a major step in the right direction. Oversight has been a lost art in the Texas Legislature.