Louisiana state's worker health insurance program has been valued between $133 million and $217 million by New Orleans-based Chaffe & Associates Inc, according to an audit released this week.
The firm was hired by Governor Bobby Jindal's administration in a bid to privatize the state worker health insurance program.
The assessment had been kept secret from the public and had only been released to senators and the Legislative Auditor's Office after senators voted to subpoena it.
Legislative Auditor Daryl Purpera included the information in his review of issues that should be considered by lawmakers before the insurance program in the Office of Group Benefits is privatized or sold outright to a private company, an audit released publicly.
The privatization effort has generated strong criticism from lawmakers and state employees and retirees who worry their health benefits might be cut, their premiums increased and a health insurance trust fund raided.
Purpera's review says the sale or lease of the Group Benefits office or plans could cause higher insurance premiums because a private company would have marketing costs, premium taxes, profit margins and reinsurance costs that OGB doesn't have.
The review also says the sale of Group Benefits could diminish legislative and state control over costs, benefits and insurance plan changes.
"These issues would need to be addressed in the contract," the audit says.
The Office of Group Benefits provides health insurance and life insurance to about 255,000 current state workers, retirees and their dependents. Some of group benefits' insurance plans already are run by private companies.
Jindal's proposal would affect about 62,000 employees, retirees and their dependents.
Commissioner of Administration Paul Rainwater said no decision has been made about whether to proceed with the privatization or sale of group benefits.
The administration has chosen financial adviser Morgan Keegan to determine whether structural changes should be made to group benefits and whether a private company should be brought in.