Monday, October 22, 2012

Committee delays debate of OGB sale

The Joint Legislative Budget Committee was slated to discuss Gov. Jindal’s plan to sell an Office of Group Benefits health insurance plan to a private company Thursday, but cancelled the meeting at the last minute.

While spokesmen for the governor’s office said that lawmakers simply needed more time to review the proposed sale of OGB’s preferred provider organization, one lawmaker, Rep. Katrina Jackson of Monroe, said the governor lacked enough votes on the committee to approve the sale.

Response to the governor’s plan has been overwhelmingly negative – more than 4,300 people have signed a Louisiana Federation of Teachers’ petition opposing privatization (Click here if you haven’t already signed the petition!).

OGB manages the health insurance of some 60,000 current and retired public employees, including teachers and school employees in a number of school systems. It is one of the best-run and scandal-free operations in state government. In fact, it has built up a surplus of some $500 million over the past few years.

The governor claims that privatizing the office would save the state money. But according to reports, the OGB currently spends only about three percent of its income on management costs. The same costs for a private company could be in the 10% to 15% range.

Privatizing the office would probably not save money for the state, but it would eliminate the jobs of 177 public servants, putting even more Louisiana citizens in the unemployment line.

Advocate reporter Michelle Millhollon wrote this story about the meeting cancellation.

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