BATON ROUGE, La. (AP) — Louisiana Gov. Bobby Jindal's top financial adviser on Tuesday defended the administration's proposal to hire a private company to run a state worker and retiree health insurance program, rebutting complaints the privatization would boost health care costs to generate short-term cash for the budget.
The proposal has rankled current and former state employees and lawmakers who say the Office of Group Benefits runs its insurance programs with low administrative costs and who call the privatization plan a bid to raid the $510 million trust fund filled with premiums paid by covered employees.
Jindal's commissioner of administration, Paul Rainwater, said Louisiana shouldn't be in the day-to-day business of running an insurance company, noting the only other state to run its own health insurance plan is Utah. He said a private company would be required to offer the same type of health care plan to workers and retirees. He said an outside firm would be more efficient and offer better claims management, though he offered no data to support those assertions.
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