* AP…
An audit released Wednesday found that a plan to save $500 million a year on state employee health insurance was so ill-conceived and poorly executed that it’s costing taxpayers $10 million extra annually without delivering the service promised.
Auditor General Frank Mautino reported that former Gov. Bruce Rauner’s administration, which originally proposed a private health insurance exchange, switched gears to an online custom-benefit portal that officials said could have been created in house. It replaced a paper-based health care program for 450,000 workers and retirees, but the promised cost-saving marketplace still isn’t in place, Mautino said. […]
State lawmakers ordered the review of the $94 million, 10-year contract with Georgia-based Morneau Shepell after an Associated Press report in June 2017 found that Morneau Shepell was the only company to respond to a November 2015 solicitation by Rauner’s Department of Central Management Services, that CMS was instructed to skip state guidelines for ensuring minority business participation, and that customers complained of system glitches.
Since then, Morneau Shepell repeatedly failed to meet performance guarantees and was allowed to revise them when reporting performance goals to CMS, the audit said. A breach of contract provision outlined in the solicitation never made it into the contract.
* From the audit…
The idea for what became the Custom Benefit Solution procurement came out of labor negotiations from the Governor’s Office and focused on achieving $500 million in annual savings. While the CMS Bureau of Benefits was unable to locate specific documentation from 2014-2015 relative to how the $500 million in annual savings would result from this procurement, it did assert that the savings were to be generated from changes to employee health insurance. The proposed changes were to create a multi-tiered system of plans, called “metal bands,” for the existing health insurance program for employees and retirees. Four tiers were to be set up – platinum, gold, silver, and bronze. The new tiered plans would have different premiums, deductibles, and co-payments levels, which the employees could choose from for their health insurance needs. The end result would have been a 60/40 split in healthcare costs borne by the employer/employee. As of December 4, 2018, over 1,000 days since the Custom Benefit Solution was awarded to Morneau Shepell, CMS reported the State has not implemented the new health plan options. Without the new plans the State has not achieved any of the anticipated savings.
Emphasis in original.
- Phenomynous - Thursday, Mar 28, 19 @ 11:36 am:
Won’t ever see savings as long as the state picks up most of the premiums for state employee platinum health plans.
- Skeptic - Thursday, Mar 28, 19 @ 11:43 am:
“..as the state picks up most of the premiums..”
One person’s savings is another person’s cost-shift.
- thoughts matter - Thursday, Mar 28, 19 @ 11:46 am:
There are two concepts being conflated here.
1. The premise that the employees would move to metal band plans as opposed to the current plans offered and negotiated with AFSCME. That has lot one thing to do with the website as it is right now. Although it sounds as if Rauner expected it to be.
2. An informational website that the employee use to sign up for insurance annually. The website is not user friendly, and often incorrect. The employees’needs were served quite well by the original in house site and internal CMS representatives to turn to when needed. There wasn’t a need for a Canadian firm with a satellite office in Georgia to be handed this project.
- Anyone Remember - Thursday, Mar 28, 19 @ 11:47 am:
Morneau Shepell - didn’t they create this little “gem” ??? https://capitolfax.com/wp-content/FB_IMG_1490363395548.jpg
- Anonymous - Thursday, Mar 28, 19 @ 11:48 am:
Sorry for the typo. I meant ‘ not one thing’ rather than ‘lot one thing’.
- Joe M - Thursday, Mar 28, 19 @ 11:52 am:
As for the part of signing up for health insurance, things went a lot smoother when CMS themselves ran the show. Morneau Shepell took something that wasn’t broken, and tried to fix it - often breaking it in the process.
- Honeybear - Thursday, Mar 28, 19 @ 11:53 am:
Two things: Yet another pinstripe patronage IT contract that Rauner did to
1) Screw Public Servants
2) Enrich the owner/investor class including himself. Blind trust my toochas.
Remember this was also just a stepping stone to state employees paying 100% of their own insurance as confirmed by RNUG
But the thing I hated was that it was going to drop my insurance ( if I wanted to pay the same) to Bronze level ACA.
The
Same
As
Medicaid
- Grandson of Man - Thursday, Mar 28, 19 @ 11:54 am:
Of course it was poorly executed by Rauner, just like the entire contract negotiations process and his gubernatorial performance. He cost the state hundreds of millions of dollars just on ripping off the newest and lowest paid state employees on step pay increases.
Rauner’s health insurance proposal alone shows how callous he is. The dude’s income skyrocketed to $279 million in 2015 and 2016, his state income tax rate dropped to 3.75% and he tried to scalp many thousands of state employees. And we shouldn’t raise taxes on him?
- Sonny - Thursday, Mar 28, 19 @ 11:54 am:
The state flouts procurement rules and flushes $30 million down the toilet en route to flushing $100 million down the toilet and your response is ‘…but the unions’? smdh
- formerpro - Thursday, Mar 28, 19 @ 11:55 am:
It was a scam from the get-go…..an excuse to layoff state workers and replace them with a private contractor. That is what happens when ideology trumps actual analysis.
- Sonny - Thursday, Mar 28, 19 @ 11:58 am:
There were no layoffs. Only transfers. The cost savings from even the outsourcing is zero.
- Raccoon Mario - Thursday, Mar 28, 19 @ 12:00 pm:
I want to see a similar study done on the ERP implementation.
- El Conquistador - Thursday, Mar 28, 19 @ 12:00 pm:
More of the failed Rauner legacy to come… what a total waste this guy was
- Groundhog Day - Thursday, Mar 28, 19 @ 12:05 pm:
Yeah, but the smoke and mirrors part of this was awesome.
- Ben - Thursday, Mar 28, 19 @ 12:06 pm:
Where is CMS and AFSCME in their negotiations of the new health benefits?
- anon - Thursday, Mar 28, 19 @ 12:06 pm:
Here at the UI, we already had an online process to do this but were forced to scrap that and implement this new system. To say it’s gone smoothly would be laughable. There’s still bad data being used and trying to get it corrected by MS is nearly impossible.
And on a personal level, for a reason that was never explained, MS terminated my DCAP mid-year without me submitting any such request. And it was a major PITA in trying to get that fixed as well. I’ve since gone to keeping the benefits summary form I get each year in case it happens again.
- Soccermom - Thursday, Mar 28, 19 @ 12:06 pm:
Does anyone know why only one firm responded to this RFP?
- Nick Name - Thursday, Mar 28, 19 @ 12:14 pm:
===Georgia-based Morneau Shepell===
That time state employees got flyers at home about the new system, with “State of Illinois, Atlanta, Ga” on the back.
- Anyone Remember - Thursday, Mar 28, 19 @ 12:15 pm:
Raccoon Mario
Here here! And detailed procedures about how many steps were required in AIS vs. the ERP (or whatever an agency was using before). Knew the ERP was “troubled” when they started saying things like “Well, AIS is a great check writer” …
- Former Downstater - Thursday, Mar 28, 19 @ 12:16 pm:
Is there anything Rauner’s administration did well?
Bueller? Bueller?
- Real Money - Thursday, Mar 28, 19 @ 12:16 pm:
Just wait till the actual costs of his Medicaid Managed Care initiative get tabulated.
- hisgirlfriday - Thursday, Mar 28, 19 @ 12:24 pm:
This is another example why if I held office I would oppose pretty much every privatization proposal put in front of me.
If it’s an essential govt. function, hire actual govt. employees to do it so there is taxpayer accountability at the ballot box for the results instead of letting politicians pass the buck to some corporate entity when there’s a screwup and fill their campaign fund with kickbacks from clouted contractors when they hand out these crap deals with our money.
- efudd - Thursday, Mar 28, 19 @ 12:32 pm:
Man did more damage in four years than most could do in a lifetime of politics.
For what? A zealot-like hate for less than a hundred thousand people that were represented by one organization, and one man in the GA.
He’ll go to his grave believing he did the right thing.
Today’s GOP.
- Steward As Well.... - Thursday, Mar 28, 19 @ 12:40 pm:
Ben 12:06 pm - Negotiations are now underway once again. For a myriad of reasons discussing existing (from the previous administration) agreements that both parties came to a resolution and possible future ones as a rule don’t get put out to the public and rank and file.
Not because it’s a big secret but until both parties sign off on a concluded contract resolved issues can and do change. What was decided one day could be a different story the next. No need to upset people unnecessarily.
- Ok - Thursday, Mar 28, 19 @ 12:41 pm:
Rauner was the king of the “McKinsey Plan,” the constant public-sector and private-sector handover of millions of dollars a year to someone who sold you something you didn’t want, don’t need, and will never get.
It is based on a fundamental assumption that recent b-school graduates billing as “associates” at $350/hr with no experience are going to get you a better outcome than public employees under any circumstance.
Or that the solution to all your problems is a brand new completely-customized database system for which you have to constantly bill them to be able to use.
Never have I ever seen it come in less expensive.
- Lester Holt’s Mustache - Thursday, Mar 28, 19 @ 12:41 pm:
We should all hold off on criticizing until Rich gets a react from Andy Shaw on this “responsible cost-savings” method
- NeverPoliticallyCorrect - Thursday, Mar 28, 19 @ 12:45 pm:
Hard to build a more ineffective and destructive Governor. But in fairness many of us voted for him because (yes you guessed it) Madigan, Quinn, and Blago. We hoped he would bring some effectiveness to state operations. But he didn’t and I am being kind, speaking for those of us out in the real world of state contracted agencies.
- The Dude Abides - Thursday, Mar 28, 19 @ 12:49 pm:
As the new administration continues to dig through the wreckage created by the Rauner administration they find things like this. If Pritzker turns out to be one of the most competent Governors we’ve ever had it will still take some time just to fix the things Rauner broke. Worst.Governor.ever.
- Anonymous - Thursday, Mar 28, 19 @ 12:51 pm:
That headline just epitomizes the Rauner years; “Rauner idea to save $500 million a year has saved nothing, costs more”
Just waiting for someone to come in with the “yeah but Madigan messed up first” song now.
- Annonin' - Thursday, Mar 28, 19 @ 12:58 pm:
What did GovJunk do right?
- Annonin' - Thursday, Mar 28, 19 @ 1:00 pm:
Don Tracy Park and Gardens
Stul Levine out of the joint
Nick Ayers skyrockets to national icon status
Aaron Shock not prosecuted
- Nick Name - Thursday, Mar 28, 19 @ 1:01 pm:
===Where is CMS and AFSCME in their negotiations of the new health benefits?===
Negotiations between AFSCME and the GO resumed on the 25th. Not starting over, but picking up where they left off when Rauner unilaterally walked away from the table.
- RNUG - Thursday, Mar 28, 19 @ 1:03 pm:
== Does anyone know why only one firm responded to this RFP? ==
Having written a lot of RFP’s, my guess is that the specs were *tailored* to one company’s solution.
- City Zen - Thursday, Mar 28, 19 @ 1:03 pm:
I would’ve eliminated Morneau Shepell from the RFP process based on their name alone.
- don the legend - Thursday, Mar 28, 19 @ 1:07 pm:
efudds last comment made me think of Margie from the movie Fargo. I feel like she could be talking to Rauner following his massive destruction of Illinois:
And for what?
For a little bit of money.
There’s more to life
than a little money, you know.
Don’t you know that?
And here y’are.
- Han's Solo Cup - Thursday, Mar 28, 19 @ 1:07 pm:
-Is there anything Rauner’s administration did well?-
Well, the mansion looks nice.
- anon - Thursday, Mar 28, 19 @ 1:14 pm:
@soccermom - only Morneau bid on the RFP because every other company who had experience running an online platform for that many health insurance plans/levels said it couldn’t be done in time frame GO wanted.
- Demoralized - Thursday, Mar 28, 19 @ 1:15 pm:
This is because Rauner put the cart before the horse. He assumed he would get his healthcare proposal. Of course you know what they say about assuming anything.
- Lincoln Lad - Thursday, Mar 28, 19 @ 1:18 pm:
No one in the Rauner Gov’s Office ran anything after it melted down. When Mike Z left, the thin team was exposed and it all went downhill. The agency leadership (not all, but certainly CMS) was also weak and not able to effectively lead. There’s no surprise here. Weak team = poor result. The challenge for JB is to not repeat it.
- Mama - Thursday, Mar 28, 19 @ 1:18 pm:
“What did GovJunk do right?”
Not sure if this is right or wrong, but made appearances around the state?
- Norseman - Thursday, Mar 28, 19 @ 1:39 pm:
=== “What did GovJunk do right?” ===
He drank beer. He loved beer.
- Al - Thursday, Mar 28, 19 @ 1:40 pm:
Ben - the Negotiators met this week. JB has a team in place and discussions are happening.
- Al - Thursday, Mar 28, 19 @ 1:44 pm:
Mama - Rauner destroyed our credit rating and rather than collecting income taxes issued billions in tax free municipal bonds to the 1.4%. These bonds were issued for Operating expenses at a time with no budget in place. We spent one billion on late fees.
- 37B - Thursday, Mar 28, 19 @ 1:52 pm:
Am trying to figure out where to file this one. Should it go under fraud, mismanagement or waste?
- Anonymous - Thursday, Mar 28, 19 @ 1:54 pm:
Oh the irony of it…. pre Rauner..progressive income tax a wild and crazy idea…after…a done deal…Made Quinn look good, and he was. Got J.B. elected. 3 for 3. Bless you Bruce for taking Republicanism to its unvarnished logical conclusion.
- wordslinger - Thursday, Mar 28, 19 @ 2:01 pm:
–Illinois Comptroller@ILComptroller
In 2018, the Rauner Administration awarded a sole source contract worth $2 .5 million to @Deloitte to assist @Morneau_Shepell — IL literally paid a vendor to monitor another vendor tasked with the management of employee benefits for employees.–
For those who have asked, I’d say Rauner did pinstripe patronage very well.
- Fixer - Thursday, Mar 28, 19 @ 2:14 pm:
Deloitte is also responsible for the mess of a system being used now by DHS that knocked folks off their benefits incorrectly in 2017. Not sure much monitoring was done of MS with them running point on it.
- Lincoln Lad - Thursday, Mar 28, 19 @ 2:24 pm:
The State spent a lot of the money that wasn’t saved on Deloitte. DHS, ERP - add it up. $100s of millions of dollars.
- efudd - Thursday, Mar 28, 19 @ 2:29 pm:
Never Politically Correct-
So, you fell for a con man.
By the by, the only thing Quinn did was make us half-a** live within a budget. We didn’t like that.
- Grandson of Man - Thursday, Mar 28, 19 @ 2:40 pm:
There were some ridiculous emails sent to state workers from Rauner and his LR person about the health insurance ripoff and other stuff during the contract fight. They tried to fool workers on health insurance, thinking the workers were gullible saps. Union leaders were there every step of the way with messaging, countering the lies.
- Klaus VonBulow - Thursday, Mar 28, 19 @ 2:46 pm:
As others have indicated this is no surprise. When the senate votes to confirms the Governor’s directors I hope the appointees will have an opportunity to address these costly contracts and what their plans are. These and many more are a waste of money and the Agencies have a fiduciary duty to protect the taxpayers.
I would also recommend these directors seek legal counsel that wasn’t appointed / hired by Rauner.
- Da Big Bad Wolf - Thursday, Mar 28, 19 @ 2:49 pm:
==If it’s an essential govt. function, hire actual govt. employees to do it so there is taxpayer accountability==
Not only that hisgirlfriday, it will be cheaper. Private companies exist to make a buck, even nonprofits.
For example looks at the private child welfare agencies that Illinois hires. They have executive staff that are bloated and make 300k to 400k salaries, even though the head of DCFS only makes a quarter of that. And as we have seen in the news recently, some of them can’t even do the job.
- Consultants watching consultants - Thursday, Mar 28, 19 @ 3:01 pm:
Failure after failure led the company to make a deal with some of the agencies to “back door” the benefit entries and changes into the agencies payroll and HR systems. This is resulting in dual entry that continues to this day for a majority of the people in the system.
- Anonymous - Thursday, Mar 28, 19 @ 4:33 pm:
I wonder if the fine people over at INN will investigate this gross miss management of tax dollars…
- McLincoln - Thursday, Mar 28, 19 @ 5:18 pm:
I fear we will all find in the coming years that Rauner is the gift that keeps on giving. This is all about governments declaring bankruptcy. Rauner followed his instructions and followed them well. It goes all the way to the top. Why do we elect people who hate government to run our government?
- walker - Thursday, Mar 28, 19 @ 6:16 pm:
Still looking for the 500m he was going to save by walking back the procurement reforms passed in 2010.
- Klaus VonBulow - Thursday, Mar 28, 19 @ 7:19 pm:
{sic} A breach of contract provision outlined in the solicitation never made it into the contract.
How does this get missed by CMS, the state procurement ethics officials and the procurement policy board?
These actions have co conspirators who are they and where are they?
- Anon - Thursday, Mar 28, 19 @ 7:29 pm:
If you’re going to look at ERP include the Tollway.
- Anonymous - Thursday, Mar 28, 19 @ 7:35 pm:
“so ill-conceived and poorly executed”
Should be the subtitle on the name plate of 1.4% official portrait.
- Anonymous - Thursday, Mar 28, 19 @ 10:22 pm:
Test
- union proud - Friday, Mar 29, 19 @ 6:51 am:
As for people asking how this company could have gotten this contract tailor made for them, read this cap fax thread:
https://capitolfax.com/2017/06/19/expensive-privatized-rushed-computerized-system-in-disarray/