Jindal Warns of State Employe Health Insurance Program Going Broke
The Governor claims the program will be near broke by end of the fiscal year without his suggested changes.
BATON ROUGE, La. (AP) — Gov. Bobby Jindal's top budget adviser said Thursday that the state employee health insurance program will be nearly broke by the end of the budget year without the heavily criticized changes planned by the Jindal administration.
But retirees and employees who face the higher deductibles and out-of-pocket costs responded angrily, telling lawmakers that they shouldn't be held responsible for what they consider the Jindal administration's mismanagement of the Office of Group Benefits.
Commissioner of Administration Kristy Nichols said without the slate of new insurance plans scheduled to take effect in January, workers and retirees would face premium hikes of as much as 37 percent to keep the program solvent. She said state agencies and local school districts also would have to pay millions of dollars for its share of the insurance costs.
"You (would be) making a choice to cut both state agencies and critical services and make cuts to the classroom. There is no way to avoid that," Nichols said. "If we make the changes in January on schedule, we will be able to avoid that scenario."
Deluged with complaints back home, more than 60 lawmakers showed up for the House Appropriations Committee's special briefing on the rewrite of insurance plans that currently cover 230,000 state workers, public school employees, judges, retirees and their dependents.
"You've got a lot of folks scared," Rep. Chris Broadwater, R-Hammond, told Nichols.
One retired juvenile justice worker from East Feliciana Parish said her out-of-pocket costs will grow by $2,300 to $3,300 more a year. Retirees talked of living on a $500 monthly pension check and facing choices between medication and electricity.
They hit the same theme over and over: that Jindal was responsible for the problem. They said the administration inappropriately dropped premiums for two years to cut state agency costs in tight budget years, a move that drained the group benefits' reserve fund by more than half and has the program paying out $16 million more a month than it takes in.
"The state has been good to me, but I was good to the state. This mess that we are currently in with our insurance is ridiculous. You would not run your business at home like this is being run," said Dianne Guillot, president of the Retired State Employees Association.
Henry Reed Sr., a retired architect from the state fire marshal's office, piled up his bottles of medications on the table and said his health plan won't continue to fill some prescriptions.
"All I want to do is fill my pills," Reed said. "I thought I had a good health plan. What am I going to do now?"
Peggy Schwartz, a teacher from St. Bernard Parish, warned: "It is really going to be an economic catastrophe for thousands of citizens in Louisiana who have done nothing to deserve this."
Nichols said the premium cuts were designed to give savings to state workers when the state wasn't able to give pay raises. She said the state had an "inflated" reserve fund that didn't need to be so large.
But she said the changes planned for January are needed to address the rising costs of health care caused by medical inflation and federal law changes.
"We take this very seriously, and this is a big deal," Nichols said. "But the issues in front of us can't be ignored. The cost of health care is rising dramatically every year."
Rep. Rob Shadoin, R-Ruston, read an email he received from a retired teacher that said in part, "I want to thank you for screwing me and the state workers again."