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Vote delayed on La. gov health privatization plan

BATON ROUGE, La. -- Lawmakers scrapped a planned vote Thursday on Louisiana Gov. Bobby Jindal's plan to hire a private company to manage a state employee health insurance plan, raising questions about whether the proposal had run into trouble.

The delay was announced a day before the scheduled hearing of the House and Senate budget committees to review the proposed contract between the Office of Group Benefits and Blue Cross/Blue Shield.

House Appropriations Committee Chairman Jim Fannin said he sought a meeting delay because lawmakers received the contract two days before the hearing and wanted more time to review the lengthy document.

"Members asked us for some more time to get to look at the contract. It was 70 to 80 pages. I thought that was a reasonable request. I wanted my staff to look at it," he said.

Critics of the plan said they think Jindal didn't have enough support for passage.

"It's our belief that the administration did not have their vote in the committee," said Rep. Katrina Jackson, D-Monroe. She added. "Members have more concerns than just reviewing the contract."

Jindal wants to hire Blue Cross/Blue Shield to run an insurance plan in the Office of Group Benefits that covers more than 62,000 employees, retirees and their dependents, called a PPO. The outsourcing, if approved, would take effect Jan. 1 and eliminate 177 full-time government jobs.

Fannin, D-Jonesboro, said he didn't cancel the meeting because a vote tally suggested the Jindal administration could fall short.

"I would suspect that it will be a close vote. And I think the votes were there. But I don't think it hurts to give folks a little extra time to look at it," he said.

Jindal's top budget adviser, Commissioner of Administration Kristy Nichols, said her office will work with lawmakers to ensure they have the information they need.

A new meeting date hasn't been set.

Jindal hadn't intended to seek budget committee approval, but the Louisiana attorney general's office said the contract required it.

The Office of Group Benefits provides health insurance and life insurance to about 255,000 current state workers, retirees and their dependents. Blue Cross/Blue Shield already runs a larger insurance plan for state workers in a contract with the office.

The Jindal administration estimates the new outsourcing proposal with Blue Cross would save as much as $20 million annually, about $9 million in state savings and the rest split among local school boards and state employees.

"We look forward to seeking (legislative) approval of a policy that saves taxpayers $20 million a year, puts Louisiana more in line with other states, has helped reduce premiums for state employees and retirees and provides quality care and service to plan members in the most cost-effective way," Nichols said in a statement.

Opponents of the Blue Cross contract question the savings estimates, object to the layoffs and say the current group benefits leadership runs the health plan efficiently.

Frank Jobert, executive director of the Retired State Employees Association, said the current operation processes claims quickly and has administrative costs lower than the industry standard. He said employees worry that to achieve savings, insurance rates will have to be raised or benefits decreased.

"We're happy with the way it is, and we're afraid of the unknown," Jobert said.