State officials discuss $145M annual savings through Medicare Advantage for retirees

The Louisiana Legislature's Appropriations Committee met on March 20, 2025, to discuss significant budgetary issues, particularly focusing on state employee benefits and potential cost-saving measures. Heath Williams, an officer in group benefits, highlighted that approximately 25% of funding for employee benefits comes from state agencies, with the remainder sourced from employee contributions and federal funds.

A key topic of discussion was the proposal to transition eligible retirees to a Medicare Advantage (MA) program, which could potentially save the state an estimated $145 million annually. However, Williams expressed caution regarding the proposal, noting that he had not reviewed the specific details and emphasized the need for thorough analysis before making any decisions.

The committee explored the challenges of implementing such a transition, particularly the lack of a Preferred Provider Organization (PPO) product that would allow retirees to have nationwide coverage. Williams mentioned that retirees have been requesting a Medicare Advantage PPO product to address rising healthcare costs and limited cost-of-living adjustments.

The committee plans to issue a Request for Proposals (RFP) for a Medicare Advantage PPO product, alongside other MA options, to better serve retirees' needs. Williams indicated that if a lower-cost product with comparable coverage were offered, many retirees might voluntarily switch to the new plan.

The meeting concluded with a commitment to continue discussions on these topics in future sessions, as the committee seeks to balance budgetary constraints with the healthcare needs of state employees and retirees.