Resignation Raises New Questions On Jindal’s Health Care Privatization Push

Less than two months ago, Scott Kipper replaced Tommy Teague as the head of Louisiana’s Office of Group Benefits (OGB). Teague was apparently ousted for his refusal to go along with the Jindal administration’s plan to privatize the agency, which manages state workers’ health insurance. This week, the saga took another twist, with Kipper turning in his own resignation.The administration has argued that the state shouldn’t be in the health insurance business, and has claimed that privatizing all or part of OGB would eliminate 149 jobs and generate recurring savings of $10.2 million, along with a significant upfront payment. But critics have questioned those figures, and the necessity of altering an agency that, by many accounts, provides good, reliable services and has accumulated a surplus of over $500 million. Some have even gone as far as suggesting that the move is an attempt to raid the surplus money.

Kipper’s resignation “follows a stormy confirmation hearing last week during which senators accused him of withholding information about the privatization effort,” according to the Associated Press.

The debate apparently centers on a report prepared by New Orleans company Chaffe & Associates, outlining the OGB privatization plan. According to WAFB, Kipper “reportedly didn’t want to refuse access” to the report, while Commissioner of Administration Paul Rainwater wants to keep it out of public view.

“Well okay, so here, first of all, the report has just been completed,” Rainwater told WAFB on Monday. “Secondly, what I’ve got to make sure is that the report itself does not cause us a problem as we go through a solicitation of offers.”

Tom Aswell, a former state employee and vocal critic of the privatization push, wrote on his blog on Monday that the administration has argued to him that the report is “exempt from the public records law.”

Another critic of the plan, state Sen. Butch Gautreaux (D), told WAFB the administration doesn’t want to make the report public “because it indicates that [privatizing OGB is] not a very smart thing to do.”

Kipper’s resignation will be effective June 24, the day after the regular legislative session ends. The move also apparently eliminates any need for a confirmation vote in the state Senate. Publicly, at least, the administration is not citing any rift with Kipper.

“He was not asked or encouraged to [resign] — in fact, he was encouraged to reconsider,” Michael DiResto, spokesman for the governor’s Division of Administration, told the AP in an e-mail. “Mr. Kipper has had a long and distinguished career in insurance, but he expressed his conclusion that he did not believe the appointment was a good fit for him, and so his resignation has been accepted.”

That’s different from what Rainwater said when Teague was fired in April.

“We just think it is extremely important to have a leader who will work with us,” Rainwater said at the time. A few days later, Teague testified at a state Senate committee hearing that there were “a million details that would have to be worked out in order for a sale to be favorable to the state.”

The administration has issued a second Request For Proposals (RFP) looking for a third party to facilitate any deal involving OGB. Goldman Sachs expressed interest after the state issued the first RFP in February, but negotiations later broke down.