Under pressure from lawmakers and retirees, Gov. Bobby Jindal’s administration announced it will lessen the impact of upcoming changes for the state worker health insurance program.
Increases in out-of-pocket costs and deductibles that had been planned for retirees effective March 1 have been scrapped, and the ones planned for active employees have been reduced by 10 percent to 20 percent.
As a trade-off, premiums will rise July 1 by as much as 11 percent for both retirees and employees, to get the insurance program back on track after it has nearly drained its reserve fund to cover monthly costs.
Commissioner of Administration Kristy Nichols, the governor’s chief budget adviser, announced the adjustments in a meeting with the House and Senate budget committees.
“I think the bulk of the concerns we have heard will be addressed through these changes,” Nichols told lawmakers.
Lawmakers have been inundated with complaints about the health benefit rewrite for the 230,000 state workers, public school teachers, retirees and dependents covered through the Office of Group Benefits. They urged the Jindal administration to rethink its course.
Retirees and employees said they’d prefer premium hikes to hefty increases in their out-of-pocket costs. By shifting to increased premiums, higher costs are shared between the state and its employees, rather than placed entirely on the workers.
That means employees and retirees will pay about $36 million more annually for health care starting July 1, while state agencies will face an estimated $56 million cost hike and local school boards a projected $38 million health care cost increase.
Legislators praised the changes.
“We want to make sure we’re a good watchdog” for employees and retirees, said Sen. Francis Thompson, D-Delhi. “We’re headed in the right direction I think.”
Even frequent Jindal administration critic Rep. Katrina Jackson, D-Monroe, offered kind words. “I am very impressed with the administration this time. Is that my first time ever saying that?” she said, triggering laughter in the room.
The administration blames rising health care costs and new federal regulations for the need to rework the insurance program’s benefit plans. Critics fault what they consider the governor’s mismanagement of the program. Group Benefits was on track to be nearly broke by the end of this budget year without either cost reductions or an influx of new cash.
Under the latest adjustments, anyone retired by March 1 will see no changes to deductibles and the maximum they can be charged annually for out-of-pocket costs. They will see higher co-pays for doctor visits until they reach the maximum, however.
Plans available to active state employees and public school teachers will have higher co-pays, deductibles and out-of-pocket maximums starting March 1. But the cost-shifting to workers will be less than had previously been planned.
New medication restrictions and requirements for prior authorization for certain medical procedures that took effect earlier this year will remain.
Group Benefits members will have until Dec. 7 to choose their benefit plan for next year.
Topics Legislation Louisiana
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