Georgia's Latest Teacher Problem: A Lawsuit Over Health Insurance
By James Salzer
The state is overcharging thousands of teachers, state employees and retirees for their health insurance, according to a class-action lawsuit filed against the Georgia Department of Community Health.
A. Lee Parks, one of the lawyers who filed the suit in Fulton County Superior Court, said the state is overcharging many of the 650,000 members of the State Health Benefit Plan, which has been a political headache for Gov. Nathan Deal and the DCH for almost a year.
Parks estimates that plan members have been paying more than $10 million a month in excess health insurance premiums since the agency made changes in January aimed at placating teachers, employees and retirees. The changes were made after plan members complained that the state was trying to save $200 million a year in part by charging them much higher out-of-pocket costs for health care.
The DCH's changes resulted in lower out-of-pocket costs, but they left some members paying much higher rates while getting the same coverage as members paying much lower premiums.
Those paying the higher premiums still have lower deductibles for their coverage, but they say much of what they pay for standard health care doesn't go toward those deductibles. Some teachers and retirees said they should have been allowed to sign up for the lower-cost plan once the DCH made the coverage fixes in January.
A DCH spokeswoman said the agency does not comment on pending litigation.
The $3 billion-a-year insurance plan has been a hot topic since last summer, when the contract to manage the program for 2014 was awarded to Blue Cross and Blue Shield of Georgia. That prompted one of the companies that had been managing the plan, UnitedHealthcare, to sue the state, arguing that the DCH had resorted to "state-sponsored bid-rigging" to steer the contract to Blue Cross and Blue Shield.
To save money, the state limited the insurance offerings to three plans, with different deductibles and premiums, along with higher out-of-pocket costs.
Once those higher costs started kicking in, teachers, state employees and retirees revolted, forcing Deal and the DCH to backtrack and add back lower co-payments for services, costing more than $100 million.
By doing so, the lawsuit says, the state made all three plans similar. But the premiums didn't change, so those in the highest level plan paid more than twice as much as the lowest-cost plan. The difference for family coverage for an employee runs as high as $279.44 per month, the lawsuit said.
"Their explanation so far is, 'we have the right to change benefits,' " Parks said. "It is kind of like, I want a premium package on my new Ford, and they say it will cost $2,000. You pay the money, but you don't get the package."
News of the lawsuit was posted this week on the Facebook page of the 15,000-member Teachers Rally Against Georgia Insurance Changes, or TRAGIC.
"We are pleased that State Health Benefit Plan members took it upon themselves to initiate a class-action lawsuit regarding the upheaval in our benefits this year," said Ashley Cline, the wife of a Cherokee County science teacher and founder of the group.
"While TRAGIC did not originate the lawsuit, we will certainly communicate important news and information to all of our members as this affects many of us enrolled in the State Health Benefit Plan," she added. "Feedback from TRAGIC members has been very positive so far, and many members are grateful that someone is taking action on their behalf in an attempt to rectify this situation."
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