Members of the House Appropriations Committee and the Senate Finance Committee were being lobbied heavily by both sides on Wednesday in the final hours leading up to Thursday’s joint committee meeting to consider the privatization of the Louisiana Office of Group Benefits (OGB).
State Rep. Katrina Jackson (D-Monroe) said on Wednesday that she was concentrating on members of the House Appropriations Committee “because the concurrence of both committees is required.”
She said by mid-morning there appeared to be four undecided votes on the House committee.
“We need two votes,” she said, to block the move by Gov. Piyush Jindal. “Neither side can say it has the votes,” she added.
For those who might be interested in getting in their two-cents worth, here are the links to the names, phone numbers and email addresses for the members of each of the committees:
The privatization, which would have Blue Cross/Blue Shield of Louisiana (BCBS) take over the operations of the agency’s Preferred Provider Organization (PPO), was approved by the State Civil Service Commission in August but State Rep. Katrina Jackson (D-Monroe) requested and got an attorney general’s opinion that said the administration must obtain the concurrence of the legislature to finalize the transfer.
BCBS already serves as the third party administrator (TPA) for OGB’s HMO program.
OGB has accrued a fund balance in excess of $500 million over the past six years since Tommy Teague took over as director of OGB. But he was fired on April 15, 2011 when he did not get on board the Jindal privatization plan quickly enough. His successor lasted only six weeks before he, too, was gone.
Jindal has claimed that a private TPA would be able to run the various health and life insurance plans of about 225,000 state employees, retirees and their dependents.
A Legislative Auditor’s report, however, said that privatization could lead to increased health insurance premiums because of a private insurer’s higher administrative and marketing costs, its requirement to pay taxes on income and its need to realize an operating profit. The state does not pay taxes nor is it required to turn a profit.
The Jindal administration has employed tactics bordering on the clandestine in efforts to shore up its position. At one point it even refused to release a report by New Orleans-based Chaffe & Associates with which it contracted to determine the “fair market value” of OGB’s business.
When a copy of the report was released, however, questions arose immediately because of conflicting dates given by the Division of Administration (DOA) as to its receipt date and by the fact that none of the pages of the report was date-stamped.
DOA routinely date stamps every page of documents it receives to indicate the date and time the documents were received.
This led to speculation that there may have been two Chaffe reports. Even so, the one that was leaked to the Baton Rouge Advocate said that a private insurer would be required to build in the extra costs of taxes and profits when setting premiums.
Once considered a slam-dunk for approval, the vote now appears much closer on the eve of the meeting of the two committees.
Much of the reason for the change may have to do with growing resentment on the part of legislators who have seen hospitals and/or prisons closed in their districts, actions they say were taken by the administration without the benefit of giving lawmakers a heads-up.
Jindal, in closing prisons and hospitals, has done so while leaving it up to area legislators to try and explain to constituents why they will be out of work or why health care will be either cut back or unavailable.
Only this week, notices went out to 41 employees at E.A. Conway Hospital in Monroe that they would no longer be employed after Nov. 30—just in time for the Christmas holidays. Twenty-five of those were nurses.
Similar cutbacks have taken place at health care facilities all over the state and in August, Jindal abruptly announced the closure of Southeast Louisiana Hospital in Mandeville, effective this month, throwing some 300 employees out of work.
Moreover, with the earlier closure of a mental health facility in New Orleans, the entire area of Orleans, Jefferson, Plaquemines, St.
Bernard, Tangipahoa, Washington and St. Tammany will be without access to mental health treatment at a state facility.
The proposed privatization of OGB will put about 120 workers out of work.
“It’s going down to the wire,” Jackson said of the vote to turn the PPO over to BCBS. “It’s going to be close.”