City-parish says its retiree health plan shift is saving $15M annually

Last year, the city-parish announced a plan to shift retirees from its traditional employer-sponsored health plan to a Medicare Advantage plan. Doing so, officials said at the time, would allow the federal government to subsidize retiree health care costs, reducing the city-parish’s financial burden.

Now, more than 75% of eligible retirees have transitioned to the new Medicare Advantage plan.

That’s according to Mason Batts, executive director of the mayor’s office, who tells Daily Report the city-parish is now saving about $15 million a year as a result of the transition.

That figure is roughly in line with early projections. When the plan was first pitched, officials estimated annual cost savings in the range of $16 million to $19 million.

Under the previous structure, the city-parish directly covered a significant share of retiree health care claims, exposing it to year-to-year cost increases.

The new approach shifts much of that responsibility to Medicare Advantage, a program in which private insurers—in Baton Rouge’s case, Louisiana Blue—receive federal funding to provide coverage. Because Medicare Advantage plans are federally subsidized, the transition reduces the city-parish’s direct exposure to rising health care costs.

Retirees have historically relied on the city-parish for coverage after leaving the workforce. About 2,800 retirees were eligible to enroll in the new Medicare Advantage plan.

The plan is structured so current retirees are encouraged—not forced—to switch, though Medicare Advantage has been made the default option for future retirees.

Supporters of the move have said the new plan offers competitive benefits, including zero-dollar monthly premiums and lower deductibles and out-of-pocket costs, while also easing pressure on the city-parish’s already-strained budget and freeing up funds for use on other priorities.

District 4 Metro Council member Aaron Moak told Daily Report in August that savings could provide critical funding for key functions like the district attorney’s office, juvenile court, juvenile services and other constitutional offices.

But the move has drawn scrutiny from some officials and experts who have raised questions about how such plans operate compared to traditional coverage. Medicare Advantage plans can involve network restrictions and prior authorization requirements, potentially creating barriers to care.