Privatization plan still concerns U.S.

By Mike Smith
Associated Press

INDIANAPOLIS — Despite signing off on the deal, the federal government still has concerns about Indiana's proposal to hire a contractor to help run programs for food stamps, Medicaid and other assistance for the needy.

And two leading congressional Democrats who will become committee chairmen in January have criticized Indiana's proposal.

Under the plan, the state would pay a team led by IBM Corp. $1.16 billion over 10 years to help process applications for the programs and lend technical support to the state's Family and Social Services Administration, which now handles the work.

Gov. Mitch Daniels said yesterday he would decide by year's end whether to sign the contract.

The deal was approved this month by federal agencies that run the benefit programs, including the Department of Health and Human Services and the Department of Agriculture, which administers food stamps.

The Daniels administration said it had been in touch with the federal agencies since discussions began in early 2005 on how to fix Indiana's welfare system, and some changes were made in the contract to alleviate many of their concerns.

Read more on the privatization plan at the Courier-Journal.