Blue Cross wins $37M state health plan contract

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Blue Cross Blue Shield of Louisiana has won approval to administer a state employee health insurance plan in a contract worth about $37 million.

Louisiana lawmakers approved Gov. Bobby Jindal's proposal to outsource the plan to Blue Cross on Friday. Under the contract, Blue Cross will provide health benefits for about 62,000 state and public school employees, retirees and their dependents beginning Jan. 1, the Baton Rouge Advocate reported.

Commissioner of Administration Kristy Nichols said the deal could save Louisiana up to $20 million by cutting duplicative administrative costs. Blue Cross already contracts with the state to administer a large insurance plan for state workers, reported the Associated Press.

However, Rep. Katrina Jackson questioned that cost savings estimate. She said the budget for the Office of Group Benefits, which oversees state employee health plans, increases next year by $154 million, which she alleges will go directly to Blue Cross for administering the health plan, according to the Town Talk.

What's more, the privatization of the state employee contract means more than 170 workers at the OGB will face layoffs. "It is not sound fiscal policy to pay more for services while laying off 177 individuals," Jackson said. "These documents prove that we are not saving the state any money. We are, in fact, actually requiring the state to pay more."

To learn more:
- read the Baton Rouge Advocate article
- see the Associated Press article
- check out the Town Talk article

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