If you don’t have the votes in a committee to pass your proposal, it’s great to be able to kick off two of the “no” voters. That appears to be what has happened with the House Appropriations Committee, where two Republicans who voted against the Jindal administration on an insurance contract were abruptly replaced.
On Nov. 1, in a chaotic meeting to discuss the insurance management contract for the Office of Group Benefits, Commissioner of Administration Kristy Nichols pulled the much-discussed proposal, after losing a procedural vote among the Appropriations members.
Then, House Speaker Chuck Kleckley, R-Lake Charles, abruptly fired two committee members: Reps. Cameron Henry, R-Metairie, vice chairman of Appropriations, and Joe Harrison, R-Napoleonville.
While there’s no official connection between the two events, and both members had bucked Gov. Bobby Jindal on a few other issues, the guillotine fell with a swiftness after the OGB vote that the State Capitol took as cause and effect.
The two men’s replacements were in the majority when lawmakers recently approved the new contract. Under the contract with the Office of Group Benefits, Blue Cross/Blue Shield will manage a health plan that covers 62,000 state and public school employees, retirees and their dependents. The contract will begin Jan. 1.
The Senate Finance Committee backed the contract in a 10-3 decision, while the House Appropriations Committee agreed in a 16-10 vote, giving the deal final passage.
While critics of the privatization questioned the savings, the fact is some are likely, in the form of around 90 employees laid off in the OGB office.
Nichols noted that Blue Cross/Blue Shield already runs a larger insurance plan for state workers in a contract with the office.
“We think this is a very good way to simply save money for the taxpayer by consolidating administrative services,” Nichols said.
While some Democrats on the legislative committees object to any privatization, we do not necessarily agree. We share the critics’ concerns about privatization of prisons, as private owners do not necessarily share the state’s commitment to rehabilitation of inmates.
In this case, as the administration pointed out, only Utah continues to administer its insurance policies directly; every other state has contracted out this back-office function. We do not necessarily object to that kind of privatization, but it must stand the test of time.
This is a victory for the administration, given an added bit of satisfaction at showing its toughness in dispatching dissenters, even from GOP ranks. But what about the future?
One of the dirty secrets of privatization in general is that costs don’t go away. Under the new contract, Nichols’ Division of Administration remains responsible for oversight of services to employees. The state is still responsible for the availability of affordable insurance for its employees.
Nichols said the contract with Blue Cross will save $20 million annually, with about $9 million of that for state agencies and the rest divided among local school boards and state employees. The Legislative Fiscal Office instead pegged the savings at some $11 million to $18 million.
Either way, that is real money.
We hope that critics of this plan will find, after a year or so of experience, that the state has both saved money and provided better service through this contract.
And if not, the critics can then raise an appropriate ruckus.
The way that Kleckley’s ax fell on two members is almost certain to engender hard feelings, and if the contract does not work out, then retribution is likely.