The running joke during a forum Tuesday on the possible privatization of a state employee health plan was the absence of the Jindal administration.
Name cards at the speakers’ table reserved spots for Gov. Bobby Jindal, his executive counsel and his top budget adviser. The spots sat vacant. The water glasses and silverware at the administration’s side of the table remained untouched.
Turning to the empty seats, Jean Armstrong — with the League of WoMen Voters of Baton Rouge — teasingly called upon Jindal and his aides to speak during the program. She paused for dramatic effect, as if Jindal might suddenly enter the banquet room.
The absence of any Jindal administration official resulted in a one-sided discussion bashing the idea.
Critics are concerned that privatization will result in higher costs for those who get their health insurance through state government. The Jindal administration argues that the state should not be running a health insurance plan.
“I felt sure they would send somebody,” Armstrong told the dozens of people who attended the forum at Drusilla Place Catering off Jefferson Highway.
The governor’s press secretary, Kyle Plotkin, said later in the day that Jindal was in north Louisiana.
Jindal announced funding for a road project in Stonewall, which is near Shreveport, a few hours after the forum’s start time.
Commissioner of Administration Paul Rainwater, the governor’s top budget adviser, said he was out of town as well. Rainwater said he spoke to the Rotary Club of Alexandria.
Rainwater said the forum would not have been constructive. He said Armstrong is an outspoken critic of the privatization.
Rainwater’s spokesman, Michael DiResto, forwarded an email that Armstrong sent in June questioning whether an objective report has been issued on the soundness of the possible privatization.
Armstrong said Tuesday she never received a definite “No” from the Jindal administration on the forum. She said Rainwater’s assistant told her as late as Friday that he was trying to work the event into his calendar.
The panelists who did attend the forum spoke against a private company managing an insurance plan at the Office of Group Benefits that covers thousands of state workers, retirees and dependents.
At issue is what would happen to premiums and benefits under the oversight of a company that is in business to turn a profit.
Critics of privatization contend premiums would rise and benefits would shrink. The Jindal administration says a private takeover could save the state money without negative repercussions for health plan enrollees.
“What seems to be a short-term fix could have long-range, detrimental consequences,” said Frank Jobert, executive director of the Retired State Employees Association of Louisiana.
The Office of Group Benefits provides health and life insurance to about a quarter-million current and retired state workers and their dependents.
Some of the office’s health plans already are outsourced to the private sector. The preferred provider organization, is not and insures more than 60,000 people. A PPO is a group of doctors, hospitals and others providing health care to subscribers at reduced rates.
Turmoil has accompanied the Jindal administration’s exploration of hiring a private company to manage the PPO. The administration fired Tommy Teague as CEO of the Office of Group Benefits earlier this year. Teague’s successor abruptly quit a few months later.
The administration also sparred with legislators over the release of a financial analysis of the Office of Group Benefits. The report, which the administration released under the order of a legislative subpoena, concluded that premiums would increase to maintain a private company’s pre-tax operating margin.
The Division of Administration now is negotiating with Morgan Keegan, an investment company, on a contract to hire the firm as a financial adviser to determine the market value of the Office of Group Benefits’ book of business. Morgan Keegan also could possibly help with hiring a private company to manage the PPO if the administration decides to go in that direction.
At the forum Tuesday, Steve Monaghan, president of the Louisiana Federation of Teachers, said he has never gotten a clear answer on why privatizing the PPO would be a good idea.
Monaghan told the audience to follow the money, pointing to a surplus at the Office of Group Benefits that topped $500 million earlier this year. He said the money should not drive a privatization that could raise costs for the plan’s members.
“The risk is too great for the employees who are employed. The risk is too great for the state,” Monaghan said.
Jobert said term limits will only allow the governor to serve another four years, a shorter timeframe then it may take for the state to realize that privatization was a mistake.
Like Monaghan, Teague said he thinks the agency’s healthy surplus is at the root of possible efforts to hire a private company. Teague said the surplus is there because the agency is being run efficiently.
State Sen. Butch Gautreaux, D-Morgan City, prompted laughter when he offered to manage audience members’ personal bank accounts.
“Just trust me,” he said.
Gautreaux said he refuses to just trust the Jindal administration that privatization is a good idea.
“This has been the most clandestine administration that I’ve ever witnessed,” he said.