The Alabama House Ways and Means Education Committee heard an update on the Public Educators Health Insurance Program at a hearing in Montgomery on Tuesday, Feb. 12.
The CFO and Chief Accountant Officer of the Retirement Systems of Alabama Diane Scott briefed the Legislature on the health of the PEEHIP program.
“PEEHIP began in 1983,” Scott said. “The purpose was to provide healthcare benefits for education employees and retirees.”
Scott said that PEEHIP has three hospital and medical plans as well as dental and vision plans. Most active education employees are with Blue Cross Blue Shield of Alabama. Education employees also have the option of using VIVA Health. Only 2,500 participants are in the VIVA option. Medicare Eligible Retirees are covered by United Health Care.
Scott said that PEEHIP provides healthcare coverage to over 300,000 people. Of those, 83,223 are active education employees, 68,070 are retirees, 149,851 are covered dependents and 97 to 98 percent are Alabama residents. Some retirees live out of state.
“PEEHIP is governed by the same board as [Teachers Retirement System],” Scott said.
“That is a lot of Alabamians covered by the plan,” said Chairman Bill Poole, R-Tuscaloosa. “The employer match is paid out of our budget on behalf of the state of Alabama.”
Scott said for the first 20 years, the cost was $500 million a year. In the last 17 years, it has gone up to $1.5 billion. A special session was held in 2004 to deal with PEEHIP, so changes occurred starting in 2005. The cost continued to go up to 2010 and 2011.
“Beginning in 2011, we shifted some cost over to our members by increasing deductibles and copays,” Scott said. “We did a dependent eligibility verification. Then, we were able to get some dependents off the system. That lowered costs some, and we have continued to do that going forward. Costs leveled off in 2015 and 2016 due to changes made by the Legislature. We stopped some pharmacy scamming that was going on. On Jan. 1 2017, we switched to a Medicare Advantage program for Medicare eligible retirees. That saved $75 million a year.”
“We have fewer earlier retirees having to do with legislation that was passed in 2011,” Scott said. “I expect that we will continue to see a reduction in the pre-65 enrollments simply because those premiums are so high.”
Poole commented on the ration of retirees to active employees on the plan.
“That ratio is increasing toward one to one,” Scott said. “We may get to more retirees than actives. The number of actives are flat. We really are not increasing the number of teachers in the classroom over recent years. That means we have to ask for more money from the Legislature.”
Retirees are increasing 2,000 to 2,500 a year.
“I don’t want to reduce quality of care and reduce benefits,” Scott said. “We are putting more focus on the wellness thing. Sixty percent of our population is either diabetic or pre-diabetic.”
Scott said that PEEHIP is working on initiatives for weight management. We know that if employees can control their weight; if they control their diabetes to avoid it worsening and getting into costly chronic care; and can avoid moving from a pre-diabetic state to diabetes it will save money Scott said.
Scott said that there has been a 5 percent annual growth rate in costs of medical from 2003 to 2020.
“Members pay almost $400 million out of their pocket,” Scott said. “That is in premiums, copays and deductibles. Total employer funding is $947.1 million. $53 million comes from the universities and PEEHIP has $4.39 million in investment income
In the last three years, the cost of PEEHIP to the education trust fund budget has been level at $944.7 million and $944.7 million, Scott said. Scott said that PEEHIP was not increasing their request in fiscal year 2020.
Scott said that cost to the education trust fund is $800 per active member per month for fiscal year. It has been $800 for three years straight fiscal years 2017, 2018 and 2019. Scott said that the fiscal year 2020 request is still just $800 per active employee per month.
“I want to thank PEEHIP for keeping that level for the third consecutive year,” Poole said. “For the third year, PEEHIP will not have to increase premiums for teachers. It is up to the PEEHIP board, but that means for the third year, there appears to be level costs. I am very appreciative of that.”
Scott predicted that total medical and pharmaceutical costs will be over $1.44 billion in fiscal year 2020. That includes members share. It is expected to rise to $1.52 billion in fiscal year 2021.
“We know that as members get older, they require more healthcare typically,” Scott said.
Scott said that PEEHIP received $800 per active per month in funding from the legislature for FY 2018, and $329 of that went to subsidize an active member’s coverage. Another $223.62 went to pay for dependents’ coverage and $136.46 for retirees care.
Starting in 1987, the individual coverage premium was $2 a month, Scott said. It has gone up since then, but there have been very few premium increases for active members.
From fiscal year 1987 to FY 2010, the individual premium was $2 per month. From FY 2011 to FY 2016, it was $15 per month. From FY 2017 to the present, it is just $30 per month, except for the first three transitional years of PEEHIP’s existence — 1984–1986 — dependent coverage from FY 1987 to FY 1989 it was $93 per month. From FY 1990 to FY 2000, it was $122 per month. From FY 2001 to FY 2010, dependent coverage was $132 per month. From FY 2011 to FY 2012, it was $162 per month. From FY 2013 to the present, it has been $177 per month. Starting in 2018, spouse-only coverage was added as an option.
There is a tobacco surcharge. When that was implemented, 16.5 percent of members were tobacco users. By Jan. 31, 2019, that had dropped to where only 8.84 percent are tobacco users. If members don’t do their wellness activities, they are charged a $50 a month surcharge.
Administrative costs are just $4 million — .3 percent of the program.
“One thing we do to control costs is to have divorce audits,” Scott said. “While the terms of the divorce may require someone to provide health insurance to their divorced spouse, it does not require that they get PEEHIP. We regularly do divorce audits.”
Scott said that PEEHIP has a retirees trust fund that was established in 2007. We have a balance of $1.436 billion. The Retiree Trust has been funded by two transfers from PEEHIP in 2007 and 2008 totaling $631 million. In 2015, $92 million was taken out, and in 2016, $32 million was taken out to address funding shortfalls. The Legislature has never appropriated money to the retiree trust, and no member money has been appropriated to the retiree trust.
PEEHIP’s unfunded liability has dropped from $12 billion to $8.842 billion in 2017.
Alabama voters will decide whether to fire the state school board
The fate of the state school board will be decided by Alabama voters on March 3.
A proposed constitutional amendment, Amendment One, asks if voters want to change how the folks in charge of education at the state level are selected.
A yes vote would abolish the elected State Board of Education and the Board-appointed position of State Superintendent of Education. Instead, there will be a Governor-appointed Commission, the Alabama Commission on Elementary and Secondary Education. The Commission would appoint a Secretary of Elementary and Secondary Education, to replace the existing state Superintendent’s position.
A no vote would leave the current system in place, meaning school board members would still be elected by voters based on districts.
The Public Affairs Research Council of Alabama (PARCA) conducted an analysis of the amendment, highlighting both strengths and weaknesses of the amendment.
“Proponents say elected boards are more responsive to the public will. As elected officials, board members have their rightful place and, ideally, are only responsible to the people who elected them. They should be more empowered to oppose what they believe is not in the interests of the state’s schools and children.
At the same time, as elected officials, re-election is an important goal, if not the central goal. Thus elected board members may find themselves where the interests and desires of voters conflict with policies, programs and practices that best serve children.
Conversely, proponents of appointed boards cite the strength of the vetting process in creating boards with knowledgeable, skilled, effective board members. An appointment process allows the governor to consider the needs of the board and the qualities different candidates would bring.
Others cite that governor-appointed boards and appointed superintendents create a more efficient, aligned, and harmonious system for setting and implementing education priorities. Ambitious and substantive changes to a state’s school system are more feasible in a more efficient system that encourages collaboration and strengthens the governor’s capacity to effect change. However, while somewhat insulated, appointed boards are not immune from political pressure.”
Earlier this month, Governor Kay Ivey addressed PARCA at the annual Albert Brewer Legacy lunch at the Harbert Center in Birmingham, asking the council to support Amendment One.
“Alabama is at the bottom in about every education category that can be found,” Ivey said. “Too many of our third graders cannot read and too many of our high school graduates are not ready for a career or college.”
“Vote yes on amendment one when you go to the polls on March 3,” Ivey said. “We have had three superintendents in five years. We can do better.”
South Alabama medical residents work alongside Orange Beach first responders
Residents in USA Health’s Emergency Medicine Residency Program are given the opportunity to rotate with emergency medical services (EMS) in Orange Beach. The residents are stationed at the Orange Beach Fire Department giving resident physicians the experience of responding to emergency calls alongside paramedics and firefighters.
Paul Henning, M.D. is the associate program director of the Emergency Medicine Residency Program at USA Health and medical director of Orange Beach Fire/Rescue.
“The expertise that a patient gets in the field can determine outcomes,” Henning explained. “It bridges the gap between the physician and the paramedic. Seldom, if ever, do physicians have this kind of exposure to prehospital emergency services. It also gives the physician more perspective of what the paramedics are doing in the field. If we have an opportunity to improve the prehospital scope of practice, then we have accomplished our goals.”
Henning also serves as an associate professor of emergency medicine at the University of South Alabama College of Medicine.
He said that it is vital that physicians understand what happens in the prehospital stage of care.
The innovative program was established in July 2019.
Andrew Warner, M.D., took a nonlinear path to emergency medicine. Dr. Warner is a former Green Beret, who served with the U.S. Army 5thSpecial Forces Group on tours in Iraq and Afghanistan.
Following his military service, he went on to earn his medical degree from the University of Cincinnati College of Medicine. He completed his residency training in family medicine at USA Health and started in the emergency medicine program as a second-year resident.
Warner expressed his great respect for the Orange Beach first responders, who “epitomize true dedication to patient care and outcomes.”
“I have further learned to appreciate just how critical those precious seconds in the prehospital setting are for patient survivability,” Warner added.
Justin Thomas, M.D. is a second-year emergency medicine resident and was the first USA Health resident to rotate in Orange Beach. Thomas said that the experience opened his eyes to the constraints paramedics endure while working in the field, particularly when responding to calls in rural areas of the county.
“There are locations they respond to that may be in the middle of the woods, or down a dirt road someone only goes down once every couple of weeks,” Thomas said. “They have to lug their supplies and the stretcher to the house, assess and care for the patient, and then bring them to the ambulance.”
The medics are limited by the supplies and tools they have with them, Thomas said. “It’s much different being at a hospital with all the resources at your disposal versus working from an ambulance with limited capabilities.”
Thomas earned his medical degree from the American University of the Caribbean. He took a nontraditional route to emergency medicine. As a resident in USA Health’s Family Medicine Residency Program, he rotated in the emergency department at University Hospital and was attracted to the field.
After graduating from his family medicine residency in June 2019, Thomas was offered a spot in the new Emergency Medicine Residency Program. Dr. Thomas was given approval from the American Board of Emergency Medicine to start as a second-year because of his months of training in emergency medicine during his family medicine residency.
Economic developer Dr Nicole Jones told the Alabama Political Reporter, “Response time is critical, especially in rural areas and areas that have longer distances to medical facilities than urban counterparts. The partnership between USA Health emergency medicine residency program and Orange Beach paramedics and fire rescue is a win-win situation. Both parties learn from one another and gain a deeper understanding of the pre-hospital setting, and most importantly, having professionals available in emergency situations with unique skill sets can ultimately save more patients’ lives.”
The partnership is mutually beneficial for USA Health’s emergency medicine residency program and Orange Beach’s paramedical and fire-rescue services. By adding the resident physicians the paramedics are able to provide a higher level of care to patients.
“I love to hear the interaction between our staff and the residents,” said Orange Beach Fire Chief Mike Kimmerling. “Even when they’re not running calls, there is a tremendous amount of knowledge being transferred in their conversations.”
The residents gain more diversity of exposure in Orange Beach than in a larger city like Mobile, Henning said. “Most fire and rescues in large cities are close to hospitals, so the transport time is usually 10 minutes or less, whereas in Orange Beach the time could be significantly longer. When they are able to render care for a longer period of time, they have the chance to sharpen their skills and have more patient exposure.”
Dr. Henning said that Orange Beach also gives the residents the unique experiences of working on fire and rescue boats.
Henning said that before starting the EMS rotation, the residents are required to be fully licensed by the state and to have completed an online medical direction course. If any questions or concerns arise, Henning and other emergency medicine attending physicians with USA Health are always available to provide their medical direction. Residents cannot start the EMS rotation until their second year. As the first class of residents graduate to their second year, six residents will rotate throughout the academic year. Third-years have the option to do an additional EMS rotation.
(Based on original reporting by USA Health’s Lindsay Lyle.)
Alabama Workforce Council delivers annual report touting improved career pathways
The Alabama Workforce Council (AWC) recently delivered its Annual Report to Gov. Kay Ivey and members of the legislature. The report highlights the many and varied workforce successes from 2019. It also outlines policy recommendations to further solidify Alabama as a leader in workforce development and push the state closer to Ivey’s goal of adding 500,000 credentialed workers to the state’s workforce by 2025.
Gov. Ivey acknowledged the recent progress stating, “the continued efforts of the AWC and the various state agency partners in transforming our workforce are substantial. Significant work has been accomplished to ensure all Alabamians have a strong start and strong finish. We will continue to bolster our state’s economy through dynamic workforce development solutions to help us reach our ambitious goal.”
The AWC, formed in 2015, was created as an employer-led, statewide effort to understand the structure, function, organization and perception of the Alabama workforce system. The goal of the AWC is to facilitate collaboration between government and industry to help Alabama develop a sustainable workforce that is competitive on a global scale.
“This report details the tremendous efforts of the dedicated AWC members and their partners who have greatly contributed to the progress of building a highly-skilled workforce.” noted Tim McCartney, Chairman of the AWC. “To meet ever-growing job needs of an expanding economy, we have put forth recommendations to bring working-age Alabamians sitting on the sidelines back into the workforce to address our low workforce participation rate.”
Included among the many highlights from the report are:
- Created the Alabama Office of Apprenticeship to support apprenticeships and work-based learning statewide.
- Established the Alabama Committee on Credentialing & Career Pathways (ACCCP) to identify credentials of value that align with in-demand career pathways across Alabama.
- Furthered foundational work toward cross-agency outcome sharing through the Alabama Terminal on Linking and Analyzing Statistics (ATLAS).
- Commissioned statewide surveys to better understand the characteristics, and potential barriers, of the priority population groups (during record-low unemployment) identified as likely to enter or re-enter the state’s workforce.
- Provided technical assistance, support staff and grant writing services to a cohort of over 30 nonprofits from across the state enabling them to expand services and directly connect more Alabamians to training and economic opportunity. Services helped cohort members secure over $6.4 million in grant money through various out-of-state grant programs.
- Identified and evaluated 17 population segments of potential workers and determined the likelihood of adding members of those respective population segments into the workforce. Within this process, issues affecting the state’s labor participation rate were also detailed.
Vice-Chair of the AWC Sandra Koblas of Austal USA commented, “the energy around workforce development in Alabama right now is incredibly exciting. We are working together with businesses, nonprofits and agency partners to reduce barriers, increase opportunities and grow the state’s overall economy.”
The full report can be viewed here.
To learn more about the Alabama Workforce Council please visit: www.alabamaworks.com/alabama-workforce-council
Committee hears state plan to address student mental health
State Superintendent Dr. Eric Mackey asked the Senate Finance and Taxation Committee for funding to put more mental health professionals in schools.
While addressing the committee, Mackey said that having more counseling available for students will help to not only address student mental health but to also help teachers who are “overwhelmed” with trying to make up for the lack of counseling services.
“Teachers are the frontline on good mental health for our students,” Mackey said. “They have to do a lot of the work but teachers are not therapists. They don’t have time to do it, they’re not trained to do it and teachers in our state are absolutely overwhelmed with the problems that are coming into their classrooms.
The Alabama State Department of Education in collaboration with the Alabama Department of Mental Health created the School Based Mental Health Services Program (SBMH) in 2010 with the goal of ensuring that children and adolescents, both general and special education, enrolled in local school systems have access to high quality mental health prevention, early intervention and treatment services.
The collaboration places a certified mental health professional, hired by the mental health department, in a school system to be available throughout the school day, with an estimated cost of $50,000 per site, according to Mackey.
Mackey said in his presentation that there is a need for far more of these therapists than he is requesting but that there simply are not enough of them available to be hired. He also noted that seeking the help of social workers and organizations like the Department of Human Resources to fill that need for more school counseling would ultimately harm their existing duties.
“If we put students in therapy but then they’re going home to a dysfunctional situation, then we’re just spinning our wheels and that’s why we’ve got to have community collaborations and we’ve got to have these other strong agencies like Mental Health (Department) and DHR to support the work with the communities.”
Alabama State Senator Jim McClendon (District 11) said that he has heard from “frustrated” teachers who have to take on responsibilities apart from teaching.
“They were kind of depressed, the teachers were, simply because they felt like they weren’t able to do the job they were hired to do because they were doing so many other things,” McClendon said.
In the 2019 Fiscal Year, nine mental health centers were added with the $500,000 appropriation in FY19. There are now a total of 72 school systems participating in School-Based Mental Health. Mackey says there will be 82 by the end of this year and asked for funding for 20 more after meeting that goal.
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