The East Baton Rouge Metro Council hopes to persuade more public service retirees to switch to a government-funded health care plan it offers to help make up for a $21 million budget shortfall.
The budget gap comes after a large part of East Baton Rouge Parish broke away from the city of Baton Rouge to form the city of St. George last year, taking a crucial chunk of funding through taxes with it. COVID-era American Rescue Plan Act dollars that were funding necessary programs also dried up, widening the gap further.
To help fill it, officials will ask their 2,800 retirees, 1,800 of whom are actively using insurance from the parish, to move from private insurance coverage paid for by the parish to a plan under Medicare Advantage, a private version of the public health care plan that covers older adults and people with disabilities.
The switch is expected to save the city around $16 million, but some warn the figure can be deceiving with health care costs on the rise.
Mason Batts, executive director of the East Baton Rouge Mayor-President’s office, said without this cut, rising costs would put the parish in even more trouble
“Although we saved about $16 million worth of insurance, we had about $16 million worth of price increases coming next year,” Batts said.
The parish kept the consultants at HUB International, who came up with this plan, to see what changes they can make for 2027.
East Baton Rouge Parish already has an Advantage plan, but only a portion of retirees, about 1,000 people, are on it. To boost that, the parish will push more retirees onto those plans, which are now the default option for health insurance, unless they opt out. Parish officials are hoping they won’t.
“The federal government is, in essence, stepping in and paying for the claims,” Charlie Davis, East Baton Rouge’s chief efficiency officer, said. “We're gonna reach out to them and ask them, ‘Hey, you'll be better off in this plan.’ So most of them, we hope, will say, ‘yes.’”
Davis said the plan is a better deal for their retirees than the private insurance they’ve been used to. Under the Medicare Advantage plan, there is a zero-dollar monthly premium and lower costs for both deductibles and out-of-pocket costs. The plans also cover things not found in the other plans — like a gym membership.
Baton Rouge officials said Medicare Advantage’s network is mostly the same as the other plans, though some specialists may be out-of-network.
But Jeannie Fuglesten Biniek, the associate director on Medicare policy for health information nonprofit KFF, said retirees should take care in making the decision to switch.
“It is very difficult to switch back to traditional Medicare once you are enrolled in Medicare Advantage,” Fuglesten Biniek said.
Because you can’t have both. While traditional Medicare has no network or pre-authorizations, people on a Medicare Advantage plan often need to get prior approval from their insurance if they need to see a specialist.
“When you do not get approval, that can cause a lot of barriers and delays to care,” Fuglesten Biniek said.
Baton Rouge retirees have a 9-month grace period to switch away from the Advantage plan if they don’t like it. But they may not be able to get an affordable Medigap plan, a private insurance plan that wraps around Medicare, helping to deal with the cost and patch gaps in coverage.
Because of the way Medicare works, the price for some procedures can be expensive, and it doesn’t cover everything. So, without the guarantee of an affordable Medigap plan, it can make switching back difficult.
Fuglesten Biniek said the potential drawbacks of the advantage plans also might not show up until people get older, and sicker, and they use their insurance more.
“When you use more health care, you're gonna run up against these things more often,” Fuglesten Biniek said.
