Budget unit questions Daniels' plan to privatize benefit programs

By Ken Kusmer
Associated Press

INDIANAPOLIS -- Democratic lawmakers on the State Budget Committee yesterday questioned the wisdom of Gov. Mitch Daniels' plan to hire contractors to manage some welfare, Medicaid and food stamp work.

Despite Daniels' insistence that the proposed deal needs no legislative approval, the panel's Democrats made clear during a hearing that their party plans to learn more about the 10-year, $1.16 billion contract with an IBM Corp.-led team of vendors.

When Mitch Roob, secretary of the Family and Social Services Administration, appeared before the committee to present his agency's budget request for the next biennium, he had not planned to discuss the deal.

But state Sen. Frank Mrvan, D-Hammond, and Rep. Dennis Avery, D-Evansville, used the occasion to question Roob about the proposed contract, which still needs federal approval before the state can sign it.

Mrvan noted that similar privatization deals in Texas and Florida have met with problems, including long waiting times for calls to telephone operators.

"You've got to have that human contact," Mrvan told Roob.

The proposed contract would pay IBM and its partners to process applications for the programs received by 1.1 million Indiana residents and help manage their cases. The contract calls for shifting much of recipients' contact with the programs from face-to-face meetings to call centers, Internet access, e-mail messages and faxes.

House Speaker Pat Bauer, D-South Bend, has promised hearings on the contract during the upcoming legislative session by either the House Public Health Committee or the House Ways and Means Committee.

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