Tenorio vetoes yet another election-year bill
FOR IMMEDIATE RELEASE
October 12, 2012
The Attorney General is concerned Bill No. 513, which circumvents the procurement process on health insurance, was rushed and may subject the government to legal action. An independent actuarial consultant opined the bill, if passed into law, is unrealistic and will hurt retirees and active employees. Either one of those concerns by these independent experts would be enough to veto the bill.
Acting Governor Ray Tenorio vetoed Bill No. 513 this afternoon after calling it another election-year empty promise to people “wrought with severe legal, factual, financial and actuarial deficiencies in its assumptions and analysis.”
Governor Calvo, wanting to avoid any appearance of a conflict of interest, handed the matter to the Lieutenant Governor for his review. The Governor is in Saipan to see how Guam can help with the hospital crisis happening there.
Bill will raise costs on retirees & employees
In his letter expressing his objections to the Speaker, it all came down to bad legislation that will end up hurting some of the most vulnerable in our community on a fixed income: “Bill 513 is fiscally irresponsible, and this administration will not enact legislation that increases the cost of necessities on our manamko and on our hardworking employees.”
Acting Governor Tenorio is referring to the analysis by the independent actuarial consultant, the Hay Group, which warns that one of the impacts of Bill No. 513 will be to raise insurance costs for retirees, especially those over 65. The analysis goes on to state that the bill creates a “huge” possibility that active employees will overpay on their premiums under the financial scheme of Bill No. 513.
That scheme also was questioned by acting Gov. Tenorio and the Hay Group. “We have no idea what the contribution rates required on page 9 [of Bill No. 513] are derived from nor can one tell what relationship they have to employee contributions. Depending on the full rates quoted, the employees maybe paying more or less than they do currently for basically the same coverage,” writes Marie Dufresne, Senior Principal for the Hay Group.
The Untold Story: Benefits went up w/o addtl. costs
By contrast, the current insurance provider is providing wider coverage and more benefits this year at the same prices charged last fiscal year at no additional cost to the government of the GovGuam employee. “[I]nstead of increasing the cost of insurance, the Department of Administration (DOA) was able to negotiate — before Bill 513 was passed — a continuation of the existing health insurance, with an increase in plan designs required under PPACA, at no additional cost to the government or the GovGuam employee. To their credit, DOA was also able to negotiate a continuation of the current rates despite that the incumbent carrier could have charged more for the additional coverage as HIPAA does not place any restrictions on rates,” acting Gov. Tenorio wrote in his veto message to the Speaker.
So, despite the artificial and fictional ‘emergency’ created by the legislature on this bill, which turned out to be a rush job, the claims of providing better coverage at lower rates all turn out to be false and empty promises. The Hay Group writes, “With all of this background and built in protection for the Government, we were very surprised with this rush to pass a one year RFP process Bill that we very much believe will not save premium dollars and in fact we feel that few if any insurers would be comfortable even providing a quote given the very serious constraints in the Bill. If this happens, you would have a very uncompetitive result.”
Acting Gov. Tenorio appeals directly to Guamanians:
“Fellow citizens, take comfort. There are only three weeks left until the election. All of this phony concern and so-obvious rush to score political points at the expense of your pocketbooks will end the evening of November 6. Governor Calvo and I will remain vigilant against all these politics.”
Please call Troy Torres at 475-9304 for more information.
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