Louisiana Governor Seeks to Privatize State Worker Health Insurance Program

Louisiana Governor Bobby Jindal is seeking a financial advisor to aid his administration in determining whether privatizing one of the insurance plans of the Louisiana Office of Group Benefits would lower the state's costs of running the program.
Barclays Capital, Goldman Sachs and Morgan Keegan are all vying to advise Governor Bobby Jindal in his efforts to privatize one of the insurance plans of the Louisiana Office of Group Benefits, according to an article from the Associated Press.

Governor Jindal's Division of Administration is seeking a financial advisor to determine the market value of the insurance plan as part of its efforts to engage a private company to manage a health insurance program under the Office of Group Benefits.

About 255,000 state workers, retirees and dependents have health and life coverage through the Office of Group Benefits.
About 255,000 state workers, retirees and their dependents have health and life insurance coverage through the Office of Group Benefits, and some of the insurance plans are already administered by private companies. The Jindal administration's proposal would result in privatizing the management of the insurance coverage of about 62,000 of those employees, retirees and their dependents.
The possible privatization is spurring fears of increased premiums and decreased benefits for thousands of state workers, retirees and dependents. Jindal contends the change could save the state money without negative repercussions to health plan enrollees.[1]
Notably, the privatization proposal is opposed by the Group Benefits Policy and Planning Board, a 16-member panel that advises the Office of Group Benefits. The Board is made up of professionals from the private and public sector, representing the state’s active and retired employees from higher education to local school boards, the insurance sector, the governor and the Louisiana Legislature.

According to the Associated Press article, the Board's Chairman James Lee suggested that Jindal's proposal was raising fears that benefits will diminish and worker costs would increase.

Jindal maintains that the possible benefits of privatization are "worth at least doing the analysis" to determine whether privatization makes sense. The financial advisor will assist the Jindal administration in that analysis.

Read the full article:

1La. gov to choose adviser on insurance management, Associated Press, July 7, 2011.

3 comments:

  1. In my opinion, it all boils down to the quality of life privatization can offer to state workers. Let's put money matters aside when dealing with the men and women who work tirelessly for their country.

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  2. I think there's no problem in privatizing the health insurance program for state workers. They just have to make sure that they will retain the coverage policies for these workers.

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  3. Privatization needs to be done. This will avoid monopoly of state health insurance.

    ReplyDelete