Despite claims of ‘saving money’, Jindal’s confidential analysis shows that privatizing employee health plan would INCREASE COST
Well, well, well. Surprise, surprise, surprise.
The Jindal administration tried very very hard to keep this analysis conidential.
Jindal’s confidentially commissioned analysis on the privatizing of the state employee health plan shows that employees could expect their premiums to increase under the plan.
And of course, we knew that - Jindal’s plan was to “sell” the service to a private company which would then fork over to the state cash for the service PLUS the cash reserves the current agency has on hand ($500 million - yes, $500 million).
The state agency that operates these health plans right now operates on a break-even status; no need to make a PROFIT because it is a state agency. And of course a private company would be looking to make profit of 4.75% to 7%. There’s no way the plan can be administered FOR PROFIT and “save” money over a break-even administration of the plan.
The cash reserves that the agency has right now were collected from EMPLOYEE PREMIUMS. This is not state money. This is employee/retiree money paid in premiums. This is theft of our money, plain and simple.
The state agency, operating on a break-even basis and having no need to pay bonuses to anyone, keeps this money for the future benefit of the plan members, to pay claims and/or keep future premiums lower. A private company, needing to make a profit and paying executive bonuses - anybody think that our money would be reserved for our use by a private company?
A confidential analysis commissioned by the Jindal administration on a state employee health plan concluded that premiums would increase under privatization.
The Division of Administration hired New Orleans-based Chaffe and Associates to determine the “fair market value” of the Office of Group Benefits.
For copies of Chaffe report on privatization of the Office of Group Benefits, go to 2theadvocate.com.
Gov. Bobby Jindal is considering hiring a private company to manage one of the office’s health plans. The governor has said it would be cheaper for the private sector to oversee the plan.
The Office of Group Benefits provides health and life insurance to about a quarter-million current and retired state workers and their dependents.
Legislators critical of the privatization idea predicted premium costs would rise.
Chaffe also made that assumption, concluding that a private company would raise premiums to maintain a pretax operating margin of 4.5 to 7 percent.
The Jindal administration has said it will not support a spike in premiums.
Chaffe noted that the Office of Group Benefits’ current goal “is to manage a break-even status” and that the agency is generating surpluses through lower-than-expected expenses and cost-saving measures.