The Jindal administration took a major step Friday in its march toward privatization of state services, granting a contract to Blue Cross to handle the PPO policies in the Office of Group Benefits.
Satisfaction with how OGB employees handled claims on the policies has been high in recent years. Response was often much quicker than major insurers.
But the administration has been hell-bent to find some way to at least get a contract with a private provider to handle the 62,020 PPO policies, as the 164,765 HMO policies in OGB have been handled for several years. Now, Blue Cross will handle all the state government employees’ and retirees’ medical insurance policies.
At the beginning of this process, Gov. Bobby Jindal talked about selling “the book” of policies and completely privatizing the office. When major complaints poured in, the plan shifted to a contract for a third-party administrator.
The administration press release announcing the change that will occur Jan. 1 contains a statement that undoubtedly would not please OGB employees. It says, “As part of a reorganization plan, OGB will also be able to reduce 177 positions from OGB’s current level of 327 positions.”
Instead of “OGB will also be able to reduce 177 positions,” OGB employees are reading “OGB will be forced to lay off 177 fellow workers and friends.”
“Annual cost savings of more than $20 million per year will result from economies of scale, technology cost reductions, and administrative cost savings,” the release states.
State employees and retirees fear that Blue Cross would try to recover that by increasing premiums on their policies.
The news release seeks to allay those fears by stating, “Given this governmental streamlining effort, OGB plan members in July began paying 7 percent less in monthly premiums for health coverage. As a result of the premium reduction, for the remainder of the 2012 calendar year state employees and retirees will save almost $10 million.
via Hasten: A look at health insurance and exorcism | The News Star | thenewsstar.com.