Tweaks to health program will cost state, schools

By striking a deal to lessen the blow of health insurance changes on state workers, school employees and retirees, Gov. Bobby Jindal’s administration lowered the volume of criticism but gave itself and local school boards a new budget headache.

The Associated Press reports the administration’s latest plan, scheduled to take effect March 1, reduced increases in out-of-pocket costs and deductibles for active employees and did away with those price hikes altogether for retirees. In exchange, premiums for health insurance through the Office of Group Benefits will rise by an estimated 11% in the next budget year, about $130 million.

And that’s where the plan hits state agencies and school districts in the pocketbook.

Premium hikes are shared between employees and employers. Retirees and current workers will pay about $36 million more annually for health insurance in the fiscal year that begins July 1. That leaves $94 million in premium increases to be paid by state government and the 44 local school boards that cover their employees through Group Benefits.

School boards are seeking relief from the state to cover their $38 million projected share of the increased premium costs, saying they have been struggling to stay afloat after the recession.

“School boards already are on tight budgets,” said Scott Richard, executive director of the Louisiana School Boards Association. “We recognize that there’s going to be a very difficult budgeting session coming up in the spring. But the trend of the rising cost of health care we feel warrants a very legitimate discussion and a very serious discussion about how it’s funded.”

Trying to get new money from the Jindal administration and lawmakers will be a tough task in an upcoming budget year that has an estimated $1.4 billion hole.

Commissioner of Administration Kristy Nichols, the governor’s chief budget architect, says she’s willing to talk to the boards about additional health insurance money. But, in a statement, she also notes recent increases in state education spending and said the premium hike planned for next year will “mark the first time rates have risen above where they were in 2012.” Read the full story.