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Published: Jul 24, 2008 01:32 PM Modified: Jul 24, 2008 01:56 PM

Auditor looking at state health plan
Dan Kane, Staff Writer

The Office of the State Auditor is delving into the controversy surrounding the finances of the state health plan that serves roughly 650,000 state employees, teachers, retirees and their families.

Tim Hoegemeyer, general counsel for the auditor's office, said today that it has begun an audit into the plan's oversight and financial forecasts.

He said the audit was prompted by announcements that the plan's fortunes had gone awry, and from public requests to look into the plan.

The controversy started earlier this month, when legislative leaders caused the plan's executive administrator, George C. Stokes to be fired.

They said Stokes had not kept them informed of the plan's finances, and that they only learned recently that a projected $50 million surplus was going to turn into a $65 million deficit.
Stokes has denied in news statements that the plan is in a fiscal collapse.
He said he was improperly fired.

The state House voted at the end of the legislative session last week to provide $100 million from the rainy day fund to prop up the health plan if it runs out of money, but the Senate did not go along. Senate leaders sought to increase co-payments for plan members, which the House would not agree to.

Legislative leaders have said they may have to go into a special session later this year if the plan's fortunes worsen.

It's not known how long the audit will last.

"Basically, when the auditor goes in, even though we say we are going to focus on the oversight and the forecasting, it's open season because we have to be completely open to what we might find," Hoegemeyer said.

State Auditor Les Merritt, in a news release, urged current or former state employees with helpful information to contact the auditor hotline at 800-730-TIPS.

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