Three firms are vying to advise the Louisiana Gov. Bobby Jindal’s administration on efforts to privatize a state worker health insurance program.
Michael DiResto, a spokesman for the governor’s Division of Administration, said the firms are Barclays Capital, Goldman Sachs and Morgan Keegan.
The division is seeking a financial adviser to determine the market value of the Office of Group Benefits’ book of business, before the administration looks for a private company to manage one of the agency’s insurance plans.
“They’re at least a couple of weeks away from selecting a firm,” Gov. Jindal said.
Lesia Batiste, general counsel for the division, refused to say how much money the firms want the state to pay the financial adviser selected. Batiste wrote in an email that state law prohibits her from releasing the information prior to the selection of a company. “The evaluation of the proposals has not been completed,” she said.
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.
Jindal said the financial adviser will help his administration determine whether privatization makes sense.
“It’s worth at least doing the analysis,” he said.
The Office of Group Benefits provides health insurance and life insurance to about 255,000 current state workers, retirees and their dependents. Some of group benefits’ insurance plans already are run by private companies. Jindal’s proposal would affect about 62,000 employees, retirees and their dependents.
The Office of Group Benefits’ board recently passed a resolution opposing the privatization proposal.
“Basically, we’ve been kept in the dark,” said James Lee, the board’s chairman.
Lee said the proposal is raising fears that benefits will diminish and worker costs increase.
“People are on a fixed income when they retire,” Lee said.
Information from: The Advocate
Topics Louisiana
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