He likens privatization campaign to last year's battle over the national health-care overhaul
Gov. Bobby Jindal's administration stepped up its campaign to privatize a state employee health plan Friday, with the governor likening the effort to last year's battle over the national health-care overhaul while his chief budget officer tried to reassure beneficiaries about the possible effects of the change.
View full sizeGov. Bobby Jindal was photographed addressing the Louisiana Legislature last year. Jindal said the state has no business operating a health plan for 62,000 state employees under the Office of Group Benefits, which the administration wants to outsource to a private insurer.
"The reality is there are folks that believe it would be better for the government to run your health care," Jindal said. "And these folks got a federal law passed in D.C. called Obamacare. And some of those folks, including then-Speaker (Nancy) Pelosi, wanted a public option. They wanted the federal government to run insurance. Well, by the way, that's what we're doing in the state of Louisiana."
The governor's speech, to the non-partisan Public Affairs Research Council, was the latest in an escalating war of words between the administration and its critics over the privatization effort, which has become a prominent sideshow to the state budget debate.
Administration officials say privatization would bring in a one-time payment of $150 million and save $10 million a year in administrative costs through the elimination of 149 jobs. But a bipartisan list of critics say the numbers don't add up.
State Sen. Butch Gautreaux, D-Morgan City, has promised to hold weekly hearings of the Senate Retirement Committee until he gets certain questions answered. The Louisiana Democratic Party has taken a stand against the proposal, and House Speaker Jim Tucker, R-Algiers, said the sale likely would lead to increased premiums for beneficiaries as the buyer seeks to recoup its investment.
The administration is in the process of hiring a financial adviser to assist in the sale after negotiations to hire the Wall Street firm Goldman Sachs for that role broke down earlier this year.
The Office of Group Benefits currently provides health coverage to more than 225,000 state employees, retirees and their family members. The vast majority of them are enrolled in one of two plans -- an HMO, which is privately run by Blue Cross/Blue Shield, and a PPO plan, which is run by the state.
Hours after Jindal spoke, Commissioner of Administration Paul Rainwater released an open letter to beneficiaries promising that premium rates "would be unaffected by this transition, and increases, when they occur, will continue to be reflective of medical market rates."
Rainwater's letter also said benefits for plan members, including retirees, would not change, nor would eligibility rules, under a private provider.
Jindal, meanwhile, noted that he is also a state worker whose coverage is provided through the benefits office.
Noting that one of his two sons was born with a heart condition, Jindal said, "I'm not going to do anything that jeopardizes health-care coverage for my family or other state employees."
Jan Moller can be reached at jmoller@timespicayune.com or 225.342.5207.