As another compelling reason manifests for getting Louisiana out of the active management of health benefits for its employees and retirees, defense of the current inefficient system continues as the Gov. Bobby Jindal Administration gets ready to resume efforts at reform.
Months ago, the Administration proposed to take the book of business that it directly manages, a little less than a quarter of all enrollees, and do with it like it does to all other in the system, have a third-party manage it. In order to get access to that business, it’s estimated that an administrator would pay as much as over $200 million.
Compelling reasons exist for this, besides the one-time bonus. Analysis indicates it would save money both for ratepayers and taxpayers (roughly estimated as $21.2 million annually for the former and about $56.3 million for the latter) and reduce the size of government, joining the other 48 states that do not directly administer their benefits programs. None of these figures or facts (even after my repeated attempts to have Office of Group Benefits, or members of its Policy and Planning Board, which voted to oppose the change, produce any evidence to the contrary) is in dispute. Yet those connected to OGB both past and present and others interested in protecting government jobs continue to voice disapproval.
One such individual, former state Sen. Butch Gautreaux who when chairman of the Senate Insurance Committee (and therefore also a Board member) launched a public relations campaign trying to discourage the change (as OGB is run by the governor’s Division of Administration, the only official input from outside would come from the Joint Legislative Committee on the Budget’s ability to approve state contracts), after leaving office was hired by an interest group also against the change to continue lobbying against it. No doubt the arguments he relays to policy-makers continue to ignore the facts above and perhaps throws in the oft-quoted by opponents, but unverifiable statement that it’s a well-run state organization.
Well, maybe not any more. Last week a lawsuit was filed that alleged, through bureaucratic incompetence, OGB mistakenly overbilled employees, their families, and retirees in the Preferred Provider Organization plan that is the subject of the contemplated change. The cost to the state could end up several millions of dollars. And thus the thin case against reform now has reached threadbare status.
Originally, the Administration had hoped the PPO change would already have occurred at the beginning of 2012, but such was the ruckus from the apologists that it slowed things down enough to delay it, and the savings, until the beginning of next year, and pledged to restart the process early this year. This new revelation only reemphasizes the necessity of investigating the possibility and, if positive for the state, getting it done despite the uninformed caterwauling of vested interests wishing to keep their jobs, perquisites, or ideological imperatives fulfilled.
Posted by Jeff Sadow at 11:30