- Associated Press - Wednesday, September 30, 2015

BATON ROUGE, La. (AP) - After hemorrhaging cash for months, Louisiana’s health insurance program for state workers, public school employees and retirees is back on solid footing - though only after Gov. Bobby Jindal’s administration lessened benefits and raised costs on workers.

An update released this week from the nonpartisan Legislative Fiscal Office on the financial health of the Office of Group Benefits shows new health insurance plans that took effect March 1 have lessened the draining of the agency’s reserve fund and increased revenue.

The fiscal office says if no changes had been made, the insurance program’s reserve fund likely would have dwindled to below $50 million by June 30, the end of the last state budget year. Instead, the balance was estimated to be around $122 million.

“This likely occurred due to the significant changes to the health benefit offerings to state employees, increasing the premiums paid … and modifying the administrative management of the program,” wrote Travis McIlwain, a budget analyst for the fiscal office.

The Office of Group Benefits covers 230,000 state workers, teachers, school employees, retirees and dependents.

A lawsuit on the insurance program changes is still pending, alleging the Jindal administration violated workers’ contract rights and didn’t properly manage the insurance program.

The Jindal administration blamed rising health care costs and new federal regulations for the need to rework benefit plans and increase costs on workers. It credits the changes with boosting wellness screenings and getting people early treatment that helps lessen Group Benefits’ costs on chronic conditions like diabetes and hypertension.

Deductibles and annual maximums for out-of-pocket costs didn’t change for people retired by March 1. But higher deductibles and out-of-pocket maximums were enacted for active state employees and public school teachers.

Both retirees and current workers have seen higher co-pays for doctor visits, along with new medication restrictions and requirements for prior authorization for certain medical procedures.

In the 2013-14 budget year, the Office of Group Benefits’ was spending on average $16 million more a month than it received in premiums. Group Benefits was expected to be nearly broke by the end of the last budget year without cost reductions or an influx of new cash.

With the health plan changes, the Legislative Fiscal Office says the insurance program cut its monthly use of the reserve fund in half in the 2014-15 budget year that ended in June. The program spent about $7 million more each month than it took in.

And more money is flowing into the state insurance program since then.

Premiums rose July 1 on average by 11 percent for retirees and employees, who are paying $36 million more annually for health care. The remaining portion of the increase is covered by state agencies and the 44 local school boards that cover their employees through Group Benefits.

If premiums are raised at least another 5 percent again next year, the fiscal office says, the reserve fund would increase to the recommended range considered financially healthy.


Copyright © 2018 The Washington Times, LLC.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide