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The Governor accuses the Democratic leadership of making a "huge error" and failing to admit it. "All I hear is silence on this issue ... there isn't even a call for an oversight hearing. It's because they know that they just dug you and this government millions deeper in debt."
Even though much of the rebate has already been appropriated for other purposes, the Governor says he will release what is owed to GovGuam employees and retirees "because they are entitled to it."
However he warns he will have to "cut spending even further to make up for the deficit this will create ... We were on target for the first balanced budget in four years, and this one error messed everything up!"
HEAR the Governor's Weekly Address HERE>>>07-09 weekly address 07-09-12_1-2.mp3
According to healthcare.gov, by August 1st, more than $15-million in excess health insurance premiums must be paid back by health insurance providers to their subscribers on Guam.
Of that $15-million, $8.2 million is owed by Calvo's SelectCare which insurers GovGuam employees and retirees. The remainder is owed by other, on and off, island health insurance providers.President Obama's Affordable Care Act requires the rebates under the 80/20 rule which says insurance companies must spend at least 80% of the premiums they receive on health care to their subscribers. For example, an insurer that spends just 75% of the premiums they receive on health care, must rebate 5% to their subscribers. This 80/20 rule is also known the Medical Loss Ratio [MLR] rule. *[For large group plans, like the Calvo SelectCare plan for GovGuam employees, the MLR split is 85/15].
The rebates are supposed to be split between individuals and their employers depending on the percentage that each paid in premiums.
The problem, says the Governor, is that lawmakers last year appropriated $7.4 of the $8.2 million owed by SelectCare."A percentage of that needs to be rebated to the employees and retirees. It's their money according to the law. But how does that happen when the legislature already appropriated it?" asked the Governor.
"I tried to tell the Democrat senatorial leadership not to appropriate that money. We said it should not be considered as revenue. ""Your actions have consequences" says Governor Calvo, "please own up to them and consider how you're hurting people before you take frivolous action. In your overzealous attempt to hurt me, you've instead hurt the people of Guam."
And he appeals to to lawmakers to "make it right" in this year's budget deliberations by working with the Administration to "deliver a balanced budget without all the theatrics and funny business from last year."
READ it in FULL below:
New Batteries for the Calculator
By Eddie Baza Calvo
Over the next month many of you with health insurance will be receiving a rebate from your health insurance company. This is thanks to the medical loss ratio provisions of ObamaCare. For the government of Guam, its employees, and retirees, it's about $8.2 million. Some of that will rebate to the government. Some to the employees and retirees.
This is your money. Whoever is entitled to a rebate by federal law - this is your money. Much like the tax refunds, we take our duty to pay you back very seriously. Unfortunately, someone already appropriated your money. Unfortunately, and yet again, I will have to choose between government operations and paying you back. Of course, I will choose to pay you back. Let me explain.
In their never-ending pursuit to paint me and my family as some greedy villains, the Democrat leadership made a big deal about the medical loss ratio last year. They said that Calvo's SelectCare will have to pay $18 million in rebates for the premiums. They even said they calculated this based on the formulas. Something went wrong with the calculations.
You see, one of the Democrat leaders in the legislature told all the senators that according to his calculation, they could go ahead and appropriate $7.4 million of that. So they did. They made appropriations from that supposed revenue to fund tax refunds and retirees health insurance. How ironic.
As it turns out, the rebate is only $8.2 million. A percentage of that needs to be rebated to the employees and retirees. It's their money according to the law. But how does that happen when the legislature already appropriated it?
I tried to tell the Democrat senatorial leadership not to appropriate that money. We said it should not be considered as revenue. We asked, "How in the world do you appropriate money that you don't even know will come?" But they had their calculations, so they were ready to go.
Well whaddaya know? It's not even a year later and all I hear is silence on this issue. They know about this huge error that was made. There isn't even a call for an oversight hearing. It's because they know that they just dug you and this government millions deeper in debt. They know that you understand what that means - every time they create a deficit, they take more money out of your tax refunds account. They keep vendors from being paid. They hamper government operations.
And why? Because of political agendas. Senators of the Democratic leadership, I hope you see this for what it's worth. I hope this time around in the budget you listen to what we have to say. Stop tinkering with this budget if your calculations aren't reliable.
As for the position we're faced with now, this is what I'm going to do. I'm going to release the rebates to the GovGuam employees and retirees because they are entitled to it. In return I'll have to cut spending even further to make up for the deficit this will create. Can you imagine this? We were on target for the first balanced budget in four years, and this one error messed everything up! Senators of the Democratic leadership - your actions have consequences. Please own up to them and consider how you're hurting people before you take frivolous action. In your overzealous attempt to hurt me, you've instead hurt the people of Guam.
Make it right. Work with us and deliver a balanced budget without all the theatrics and funny business from last year.
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