February 26th, 2009

Office of Administration/Governor’s Office/Executive Offices Senate Budget Hearing

February 26, 2009

Mary Soderberg, Budget Secretary

The conversation was limited on healthcare issues but the following were mentioned briefly:

 Medicare Part B Penalties:

Senate (question):  Why are we paying for Medicare penalties?

Soderberg (reply): When the state changed from blues to benefits coverage program in the early ‘90’s, the number of people who did not correctly do what was needed to sign up for Medicare received a penalty. We decided to pay that penalty for certain people because we felt as if it was not clearly explained how to switch over.

Post Retirement Employee Benefits:

Senate (questions): Will this program be maintained?

Soderberg (reply): An actuarial study was done and we are liable for $8.5 billion in healthcare costs to state employees upon retirement. The standard board has put this cost on the books and we are liable to make payment accordingly. Our contributions have been fully funded for this cost.

Senate (question): How do you plan on paying the remaining balance?

Soderberg (reply): As of now, we have a “pay as you go” payment plan. There is no long-term payment plan established.

With Regard to the Stimulus Money:

Senate (question): Is there currently a checks and balances system set in place so that the money coming into the commonwealth from the stimulus will be fairly and appropriately placed?

Soderberg (reply):  SAP systems will track money going out through a website that can be accessed by all. We wish to be held accountable and be as transparent as possible on this issue.