The reserve fund in the state is rapidly depleting despite widespread changes made to correct it.
Louisiana Governor Bobby Jindal’s administration has taken considerable action to alter, improve, and update the health care reform in the state when it comes to the insurance program for public school employees and state workers, but despite this fact, they will still be required to use $88 million from the reserve fund in order to cover the necessary costs for 2014.
The Office of Group Benefits requires an additional estimated $7.4 million every month.
Those funds are meant to cover the various costs generated through the state’s interpretation of the health care reform when it comes to operating expenses and claims that cost more than what is being received through the payment of premiums. This additional amount that was not being covered by premiums was reported by representatives of the legislative fiscal office, which is nonpartisan.
This problem from the health care reform insurance program in the state occurs even after premiums had been increased.
Premiums increases for health insurance for these state workers had been introduced to try to overcome this “negative burn rate”, as have higher deductibles and service reductions. Those were implemented as a part of the budget for the year that was introduced on July 1, said fiscal office analyst, Travis McIlwain.
In order to be able to cover the costs of health insurance through the Office of Group Benefits, that office is required to work its way through its reserve fund that had once boasted a healthy $500 million, only three years ago. However, that has plummeted to a recent $207 million, and it is expected to dwindle to a measly $119 million by the close of this year’s budget.
McIlwain spoke to the Joint Legislative Committee on the Budget, saying that “The fund balance burn rate will be significantly reduced, but it will still be there.” Last year, even before the most recent health care reform, the employee benefits program was spending an average of $16.2 million more per month than it was bringing in. The Jindal administration has stated that the forecast is certainly an improving one and is a sign that the changes that have been made are having a desired financial effect.