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Friday, October 24, 2014
Southwest Louisiana ,
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(Special to the American Press)

(Special to the American Press)

Group Benefits’ cushion shrinks

Last Modified: Tuesday, May 27, 2014 12:15 PM

A fund that pays for state employees’ health and life insurance coverage appears to be on the fast track to insolvency.

The Legislative Auditor reported last week that the Office of Group Benefits’ funds have plummeted alarmingly over the past three years, and without either rate increases, benefit cuts or a substantial infusion from the state general fund, it will be awash in red ink by 2015.

Legislative Fiscal Officer analyst Travis McIlwain said the Group Benefits is losing $15 million to $20 million a month.

In April, 2011, the fund had a $525 million cushion. It’s projected to be at $56 million by the end of this year.

McIlwain blamed the bleeding on the state decreasing its contribution to the plan by 9 percent over the last two years and the premiums paid by the insured.

Not to worry, says Gov. Bobby Jindal’s administration. A 5 percent premium increase scheduled to go into effect July 1 should raise about $56 million. Commissioner of Administration Kristy Nichols said new pre-authorization requirements for MRIs and CAT scans, encouraging the use of generic drugs and standardizing benefit limits should build the fund to more than $160 million by the end of 2014.

She also placed some of the blame on an aging population that has more health issues.

Joint Legislative Committee on the Budget Chairman Jim Fannin, R-Jonesboro, has questioned the math of the Jindal administration, saying that the current $15 million to $20 million a month cash-flow problem won’t be totally offset by the changes in the program..

‘‘It’s going to go broke,’’ said state Sen. Ed Murray, D-New Orleans.

That’s of little comfort to the 250,000 state employees, retirees and dependents who are covered by the health insurance plan.

Nor should there be much confidence in the Jindal administration to rectify the problem, seeing that it was the short-sighted premium cuts that exacerbated the problem in the first place.

Posted By: charlie On: 6/2/2014

Title: GOP

if the voters in LA keep republicans in office this is what you get, rob the poor state workers to pay the rich republicans, look back at all the cuts our fine governor has made to state services, if you can't see this you are a blind republican!!

Posted By: Dan McCrory On: 5/29/2014

Title: Mr.

This is exactly the kind of hijinks that will get the Democrats back in office. I voted twice for Jindal, but as an independent, I would vote for a Democrat if he voiced a desire to put OGB back in the hands of the State. Dan McCrory

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