Louisiana Gov. Keeps Group Benefits Privatization Report Secret

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Louisiana Gov. Bobby Jindal’s administration handed over to senators a report involving efforts to privatize a state worker health insurance program, but has asked them to keep the document secret.

Jindal’s Division of Administration refused to provide the report to The Associated Press, and the Louisiana Senate called it confidential after the governor’s office expressed concerns about its release.

The report by New Orleans-based Chaffe & Associates Inc. is designed to help the division determine the fair market value of the insurance program in the Office of Group Benefits, as part of the administration’s push to hire a private company to run the operation.

Chaffe’s contract provided up to nearly $50,000 for the work.

After days of requests by the AP to see the Chaffe report, a spokesman for the Division of Administration replied by saying the request “is under review.” Commissioner of Administration Paul Rainwater has claimed the report is shielded from public review under an exemption given to the governor for records involving “deliberative process.”

A Senate panel voted to subpoena the report after the document became the subject of a confirmation hearing with Rainwater and his deputies. The Jindal administration turned over the document before the subpoena was issued.

Rainwater urged Senate President Joel Chaisson not to release the document to the public, saying it was “pre-decisional” and could damage the bidding process and contract negotiations by giving out preliminary analysis of the worth of the group benefits operation.

“We have significant concerns that premature disclosure of the report will prejudice the (solicitation for offers) and negotiations process. This is not a matter of secrecy, but a basic component of our ability to make decisions that are within our purview, to direct the integrity of a successful procurement,” Rainwater wrote to Chaisson on June 8.

The report was then declared confidential by the Senate.

“It is connected to an investigation that arose during the confirmation process and will not be released until the investigation is complete,” said Senate spokeswoman Brenda Hodge.

No timeline for its release was given.

Rainwater’s office also gave to the report to the legislative auditor’s office, after previously refusing to hand over the information that Auditor Daryl Purpera said was critical to determining whether the privatization would be beneficial for the state.

The Office of Group Benefits provides health insurance and life insurance to more than 148,000 current state workers and retirees and more than 107,000 of their dependents.

The privatization effort has generated strong criticism from lawmakers and state employees.

The group benefits CEO, Scott Kipper, is resigning later this month after a confirmation hearing in which senators accused him of withholding information.

The division is seeking a financial adviser to help it determine the health insurance program’s worth and the structure of a sale. Some of group benefits’ insurance plans already are run by private companies. Jindal’s proposal would affect about 62,000 employees, retirees and their dependents.

Jindal has said privatization would cut the 300-employee group benefits office in half and generate $10 million in annual savings for the state, in addition to an upfront, lump sum payment that could top $150 million. It’s unclear how a $500 million trust fund filled with premiums paid by covered employees would be handled in any privatization effort.

Lawmakers would have to approve parts of the arrangement.

Current and retired state employees worry their health benefits might be cut and their premiums increased. Critics say the Office of Group Benefits runs its insurance programs with low administrative costs, and they call the privatization plan a bid to raid the trust fund.