If OGB isn’t broken, why fix it?

Today the Senate Committee on Insurance will get to hear from Gov. Jindal’s Division of Administration Commissioner Paul Rainwater, La. Dept. of Insurance Commissioner Jim Donelon and La. Office of Group Benefits (OGB) CEO Scott Kipper on the matter of the privatization of the OGB.
Some legislators have been calling for this meeting, including Senate Insurance Committee Chairman Dist. 25 State Sen. Dan “Blade” Morrish, who met with the governor last week to voice concerns about the lack of information being made available to the public on an issue that would potentially affect all of Louisiana’s active and retired employees participating in the state’s group health, life and retirement benefits plan.
Officials pushing for the privatization issued a Request for Proposals (RFP) Monday, with the hopes of finding a private company that will outperform the efficiency of the current state-run system.
According to the OBG website, the RFP outlines evaluation criteria based on five categories. Before making a decision, OGB officials will have to grade each bidder on the qualifications and experience of their consulting firm and assigned staff, administrative management and coordination strategy, as well as the cost of both legal and actuarial services.
In addition, the proposer must meet certain requirements including a minimum of five years experience providing health benefits, as well as legal and actuarial services, at least one current client with 10,000 or more covered employees and retirees, a credentialed health actuary on staff, possession of legal and regulatory expertise including having legal counsel on staff, attendance to the Mandatory Proposers Conference by a representative of the proposer and finally, fiscal documentation and audit history of the company.
According to retired OGB CEO Tommy Teague, the state’s group benefits program is already running with more efficiency than a third-party insurance company could possibly operate due to the fact that La.’s current self-insured benefits plan has been building a network of medical providers and discounts for over 30 years.
Most large employers do not have access to group discounts because it takes a lot of time and effort to build a provider network, while the OGB has built a network over the last 30 years to include nearly every hospital in Louisiana, as well as 16,000 medical providers statewide.
Jindal wants the credit for the one-time payout to the state for selling the OGB outright to a third party, and judging by the lack of information on the proposal to the public, has no intention of responding to the public’s fears about increased premiums and decreased service.
Teague said claims are currently processed within two days and phone calls are answered in less than one minute.
“That is unheard of in the private sector,” said Teague. “I fear we will be getting worse service and lower benefits.”
You can’t blame state employees and retirees who see change as a threat to their way of life.

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Posted by on May 11 2011. Filed under Editorials. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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