Posted: Nov 2, 2012 9:03 AM by Melinda Deslatte/AP
BATON ROUGE, La. (AP) - Gov. Bobby Jindal's top budget adviser scrapped a legislative vote Thursday on the governor's proposal to outsource a state employee health insurance plan, when it became clear the contract didn't have enough support to win approval.
Commissioner of Administration Kristy Nichols pulled the proposed contract between the Office of Group Benefits and Blue Cross/Blue Shield from consideration after four hours of discussion. Her decision sidetracked an attempt by House opponents to vote on rejecting the proposal outright.
"We'd like to come back at a later date," Nichols said.
The House and Senate budget committees ended their joint meeting in a flurry of votes that went nowhere because the two sides couldn't agree on anything, not even a vote to delay a decision on the contract until next week.
Jindal proposed hiring the private company as a cost-cutting move to manage a state employee health insurance plan that covers 62,000 workers, retirees and their dependents. Critics question the savings estimates and worry the change could harm health benefits for workers.
"There are some very legitimate concerns," said Senate President John Alario, R-Westwego, a Jindal ally who persuaded senators to delay a decision rather than vote on a House motion to refuse the contract.
"I think we probably need to give a little more thought and a little more time on this issue," he said.
Nichols said the outsourcing plan would save money by consolidating duplicative administrative costs because Blue Cross/Blue Shield already runs a larger insurance plan for state workers in a contract with the office. She said employees and retirees would have more doctors available to them.
"This is one example of what I would consider a very easy administrative decision. We have duplicative functions for the same services, and the result of centralizing those functions has no impact to members, with the exception that they get greater access to a number of providers," Nichols said.
Lawmakers said they had been flooded with calls from state employees and retirees who don't understand the outsourcing plan and don't believe it would improve their costs or care. Some legislators said even if the idea was good, state workers had such mistrust of the Jindal administration that they wouldn't believe it.
"I know in my heart that this is not the right thing to do," said Ed Parker, a representative of the Louisiana chapter of the workers' union, the American Federation of State, County and Municipal Employees.
A few hours after the committee vote was shelved, Nichols issued a statement saying she was confident lawmakers would support the contract.
It was the second time a voted had been delayed.
The outsourcing, if approved, would take effect Jan. 1 and eliminate 111 government jobs, including up to 88 people who would be laid off.
The governor hadn't intended to seek budget committee approval, but the attorney general's office said the contract required it.
Nichols said the contract with Blue Cross would save $20 million annually. The Legislative Fiscal Office said about $9 million of that would be savings to state agencies, and the rest would be split among local school boards and state employees.
Rep. Cameron Henry, R-Metairie, asked why local school leaders hadn't called their lawmakers to support the contract if the school systems would be saving money.
Scott Richard, head of the Louisiana School Boards Association, said the boards hadn't received information from the Jindal administration about the savings.
Opponents of the Blue Cross objected to the layoffs and said the current group benefits leadership runs the health plan efficiently, processing claims quickly. They said they were concerned that to achieve savings long-term, insurance rates will have to be raised or benefits decreased.