Highlights and updates
- Open enrollment for 2019 coverage in Louisiana ended on December 15.
- Enrollment is still open for Louisiana residents with qualifying events.
- Short-term health plans are available in Louisiana with initial plan terms up to six months.
- 2019 premiums are lower than they were in 2018
- Lawmakers considered – but rejected – reinsurance to stabilize individual market
- Enrollment dropped again for 2018, but Medicaid continues to grow
- Humana exited exchange at end of 2017
- Average 2018 rate increase was 21%, bulk of increase was on silver plans
- 2018 rate hike would have been single-digit with CSR funding & mandate enforcement
- New law allows brokers to charge fees
- New law provides added transparency for out-of-network charges
Louisiana exchange enrollment overview
Louisiana uses the federally-facilitated exchange, so residents use Healthcare.gov to enroll in exchange plans. Enrollment in the exchange has dropped sharply since 2016, but that’s due in large part to the state’s late expansion of Medicaid, where enrollment has continued to grow (481,500 people were enrolled in Louisiana’s expanded Medicaid program as of November 2018).
Premium subsidies were significantly larger for 2018, due in large part to the fact that cost-sharing reduction funding was eliminated by the federal government, and the cost of cost-sharing reduction was added to silver plan rates for 2018. As was the case in 2017, premium subsidies grew in 2018 to keep pace with the cost of coverage, protecting more than 90 percent of Louisiana exchange enrollees from the brunt of the rate increase. But for 2019, subsidies are shrinking a little, because average premiums, including average benchmark premiums, are lower than they were for 2018.
To stabilize the individual market and minimize future rate increases, Louisiana lawmakers considered legislation that would have implemented a reinsurance program, with federal funding contingent on the approval of a waiver proposal. Alaska, Oregon, and Minnesota have implemented reinsurance programs, and several other states are considering this option. But the legislation did not succeed in 2018, so although the state had already posted a draft 1332 waiver proposal, it did not end up being submitted to CMS.
HHS estimated that there were about 34,000 people in Louisiana who had off-exchange coverage in 2016, but who would be eligible for subsidies if they switched to on-exchange plans instead (subsidies aren’t available outside the exchange).
Premiums are lower for 2019
Open enrollment for 2019 coverage ended on December 15, 2018. All plan selections and changes made during open enrollment will take effect January 1, 2019. (Residents with qualifying life events may still enroll in ACA-compliant coverage, however.)
Rate filings in Louisiana were due by June 20, although details weren’t available until August 1. At that point, the Louisiana Department of Insurance announced that average rates for individual market plans sold through Louisiana’s exchange would be 6.4 percent lower in 2019 than they had been in 2018. And that’s despite the fact that rates are still higher than they would otherwise have been if the GOP tax bill hadn’t repealed the individual mandate penalty as of 2019, and if short-term plans and association plans hadn’t been expanded by the Trump Administration (all of those factors serve to push healthy people out of the ACA-compliant health insurance market, leaving a sicker risk pool and premiums that are higher than they would otherwise have been). At ACA Signups, Charles Gaba estimates that premiums in Louisiana would have dropped by nearly 16 percent without those factors.
Louisiana’s exchange has three participating insurers, although two of them — Blue Cross Blue Shield of Louisiana and HMO Louisiana — are part of the same company. The following average rate changes have been approved for 2019:
- Blue Cross Blue Shield of Louisiana (Louisiana Health Service and Indemnity Company): roughly a 15 percent decrease, although it varies by plan.
- HMO Louisiana (a subsidiary of Blue Cross Blue Shield of Louisiana): roughly a 6 percent decrease, although it varies by plan.
- Vantage Health Plan: 4.25 percent decrease
Blue Cross Blue Shield of Louisiana earned a profit of $59 million on their individual market business in 2017, after losing more than $200 million between 2014 and 2016. Rates for 2019 are based in large part on performance in 2017, since the rate filings for 2019 were submitted in early-mid 2018. Their rate hike for 2018 was substantial, which explains why rates were able to drop for 2019. If it turns out that an insurer spent more than 20 percent of total premiums on administrative costs (including profits), enrollees will receive rebate checks in future years.
The average benchmark plan premium is 5.1 percent lower in 2019 than it was in 2018. Premium subsidies are based on the cost of the benchmark plan, so subsidies are a little lower in 2019, since the average premiums they’re being used to offset are also a little lower. But it’s particularly important for enrollees to shop around during open enrollment, as the price of the benchmark plan in a given area might drop by more than the price of a particular enrollee’s plan, resulting in a higher net premium. Nearly everyone in Louisiana’s exchange — 92 percent in 2018 — receives premium subsidies, so fluctuations in benchmark premiums are just as important as fluctuations in a person’s actual policy rate.
Earlier in the year, there was the possibility that rates for 2019 might be moderated by a state-based reinsurance program (details below), but the requisite legislation did not pass in the Senate, so the state is not seeking federal funding for a reinsurance program.
Senate did not pass legislation to create reinsurance program in Louisiana, draft 1332 waiver proposal wasn’t submitted to CMS
Reinsurance is a system under which insurers are compensated for high-cost claims, and the result is lower premiums for everyone in the insurance pool. The ACA included a federal reinsurance program, but it was temporary and only lasted through the end of 2016. To mitigate rising premiums and stabilize their individual insurance markets, Alaska, Oregon, and Minnesota have implemented reinsurance programs, and have seen either very small premium increases or premium decreases as a result. And Wisconsin, Maine, Maryland, and New Jersey all received approval for reinsurance programs that are taking effect in 2019 and have helped to stablize the individual markets in those states.
Louisiana appeared poised to implement reinsurance for 2019 as well; the concept had bipartisan support in the legislature and was also supported by Insurance Commissioner James Donelon.
H.B.246, which passed and was signed into law in late May, authorized the state to seek a 1332 waiver to implement a reinsurance program. But H.B.472, which would have created the Louisiana Health Reinsurance Association and authorized the state to levy a fee on Louisiana health insurers to fund the state’s portion of the cost of the reinsurance program, passed the House but stalled in the Senate.
While the bills to authorize the reinsurance program and 1332 waiver were still making their way through the legislature, the Louisiana Department of Insurance had already drafted a 1332 waiver and opened it up for public comment, through May 9. But since the legislation to create and fund the state reinsurance program did not pass, the proposed 1332 waiver wasn’t submitted to CMS. It’s unclear whether the issue might be reconsidered in 2019, as it will likely depend on the state of the insurance market at that point. But for the time being, reinsurance isn’t going anywhere in Louisiana.
If lawmakers had passed H.B.472, the Louisiana Health Reinsurance Association would have sought federal funding for the reinsurance program with a 1332 waiver, and would have imposed a fee on health insurers in Louisiana (including those in the individual and group markets, as well as self-insurers and third-party administrators, but not on private Medicaid or Medicare insurers), of not more than $2.50 per member per month, and projected to be about $1.40 per member per month.
The federal funding, estimated at $100 million, would have been generated by the savings that the federal government would have realized due to the lower premiums that would have applied in Louisiana if the reinsurance program had been implemented. Since premiums would have been lower than they’ll be without the reinsurance program, premium subsidies (paid by the federal government) would also have been lower. Instead of having the federal government keep the savings, a 1332 waiver would have sought to allow the state to use the savings to fund the reinsurance program, as other states have done.
The Louisiana Department of Insurance projected that premiums would be an average of 17.3 percent lower with reinsurance. There would have been no significant change in net (after subsidy) premiums for people who get premium subsidies, but premiums would have been lower for people who have to pay the full premium without the help of premium subsidies. This would likely have resulted in more people enrolled in coverage, since coverage would have become more affordable for that population. The draft 1332 waiver noted that enrollment was expected to be up to 7.5 percent higher in 2019 if the reinsurance program had been enacted. All of this is a moot point now, however, since the state did not enact the legislation to create the reinsurance program.
2018 enrollment declined again, but Medicaid enrollment has continued to grow
Open enrollment was only half as long for 2018 coverage, and federal funding for HealthCare.gov’s marketing and enrollment assistance was sharply curtailed. The result was lower total enrollment in most states that use HealthCare.gov. But while the average enrollment drop was about 5 percent, enrollment in Louisiana’s exchange dropped by more than 23 percent — the largest drop in the country.
But enrollment in expanded Medicaid, which took effect in mid-2016 in Louisiana, has continued to grow, which is likely a big part of the reason that exchange enrollment has declined so much. In most states that have expanded Medicaid, enrollment in Medicaid grew sharply in 2015 and 2016, and had mostly plateaued by 2017. But Medicaid expansion didn’t take effect in Louisiana until the summer of 2016, so the state is still in its first two years of Medicaid expansion, and enrollment has continued to grow sharply.
305,000 people had enrolled in expanded Medicaid in Louisiana by the fall of 2016, and that had grown to more than 471,000 by April 2018. Not coincidentally, enrollment in private plans in the exchange has dropped from 214,148 people in 2016 to under 110,000 in 2018. Before Medicaid was expanded in Louisiana, people with income ranging from 100 percent to 138 percent of the poverty level were eligible for premium subsidies in the exchange. Now that Medicaid has been expanded, people in that income range are eligible for Medicaid, and subsidy eligibility starts at 139 percent of the poverty level.
And while Medicaid enrollment has long-since plateaued in most states that have expanded coverage, Louisiana was two and a half years behind most other states in the expansion process, so it’s not unexpected that Medicaid enrollment is continuing to grow, while exchange enrollment has dropped sharply in 2017 and 2018.
But it’s also likely that a significant number people who don’t get premium subsidies (ie, the population with income above 400 percent of the poverty level) have exited the exchange over the last two years, as premiums have grown considerably and there’s no mechanism to protect people from the rate hikes if they’re ineligible for premium subsidies. However, exchange enrollment has always been tilted towards the lower end of the income scale, with 90 percent of exchange enrollees in Louisiana qualifying for premium subsidies as of 2017.
Humana exited at the end of 2017
Humana exited the exchanges in four states at the end of 2016, but they continued offering exchange plans in Louisiana for 2017. However, Humana announced on February 14, 2017, that they would exit the individual market nationwide at the end of 2017. Louisiana is one of 11 states where Humana offered individual market plans in 2017, but those plans are no longer available in 2018.
CMS confirmed in October 2017 that people whose plans were being discontinued would be eligible for the special enrollment period, despite the fact that HealthCare.gov would automatically match these consumers to a new plan if they didn’t pick one themselves. Humana enrollees in the Louisiana exchange were mapped to a comparable plan from another insurer if they didn’t pick their own new plan by December 15.
But they also had a special enrollment period that continued through March 1, 2018 (60 days after the December 31 loss of coverage date).
2018 rates much higher than they would have been if CSR funding had been appropriated
Insurers that wished to offer 2018 plans in Louisiana had to submit rates and forms by June 2, 2017. The filings are publicly available on the Louisiana Department of Insurance website. The following average rate increases were determined reasonable and implemented for 2018:
- Blue Cross Blue Shield of Louisiana: 35.46 percent for Blue Saver (7,613 members as of April 2017) and 31.1 percent for Blue Max (14,224 members as of April 2017). Total BCBSLA individual ACA-compliant membership is under 22,000 in 2017, down from more than 59,000 in 2016.
- HMO Louisiana (a subsidiary of Blue Cross Blue Shield of Louisiana): 14.87 percent. HMO Louisiana had 54,437 members as of early/mid-2017.
- Vantage Health Plan: 28.46 percent. Vantage Health Plan has roughly 16,000 members.
All three insurers based their 2018 rates on the assumption that cost-sharing reductions (CSRs) would not be funded by the federal government in 2018, and indicated that silver plan rates would be higher than they would otherwise have been, due to the uncertainty surrounding CSR funding. This was ultimately a good decision, as the Trump Administration eliminated funding for CSR in mid-October, despite months of consumer advocates, insurers, and governors (including Louisiana’s governor) calling on Congress to appropriate funding for cost-sharing reductions (CSRs) in order to stabilize the individual insurance markets.
58 percent of Louisiana exchange enrollees were receiving cost-sharing reductions in 2017; that benefit continues to be available in 2018, despite the fact that the federal government is no longer reimbursing insurers for the cost. Louisiana insurers incorporated the cost of providing CSR into higher premiums for silver plans.
It’s noteworthy that Vantage Health Plan’s actuarial memo indicated that they created four new silver plans that are only available off-exchange for 2018. They have slightly different benefits compared with the other silver plans that are available on and off-exchange. This allows people who don’t get premium subsidies to purchase a silver plan outside the exchange without the CSR load built into the premiums. If the same plan is sold on and off-exchange, the rates have to be the same. But a slightly different silver plan sold off-exchange could have its own pricing, and would not have to reflect the higher cost associated with the CSR load.
If Congress had committed to appropriating funding earlier in 2017, the proposed rate changes in Louisiana would have been much smaller for 2018. A Kaiser Family Foundation analysis in April 2017 estimated that if CSR funding was eliminated, rates for silver plans in Louisiana’s exchange would have to increase by 20 percent. At ACA Signups, Charles Gaba notes that this translates to 14.2 percent across all plans, which is a significant portion of the proposed rate increase.
The anticipated lack of enforcement of the individual mandate was another factor that drove rates higher in 2018; if the Trump Administration had committed to enforcing the individual mandate, the rate changes for 2018 would also be more modest. Instead, Republican lawmakers ended up passing a tax reform bill (after the end of open enrollment) that calls for the individual mandate penalty to be eliminated, albeit not until 2019.
On average, Louisiana rate increases would have been in the single digits (a little over 7 percent) if CSR funding had been committed (rather than eliminated) and the individual mandate was being strongly enforced. Instead, the average rate increase was more than 21 percent.
It’s important to note that premium subsidies have offset the rate increases for the vast majority of Louisiana exchange enrollees. 90 percent of Louisiana exchange enrollees were receiving subsidies as of February 2017, and those subsidies grew to keep pace with premium growth in 2018. Premium subsidies are designed to keep the after-subsidy premium of the second-lowest-cost silver plan at an affordable level. That amount is designed to stay relatively steady from one year to the next, but the IRS actually reduced the percentage of income that people have to pay for the second-lowest-cost silver plan in 2018, which means that net premiums decreased slightly (enrollees may have to switch plans in order to continue to have the plan that offers the best value in 2018).
And because the cost of CSR has been added to silver plans, 2018 premium subsidies in Louisiana are larger than they would have been if the cost of CSR had been spread across all plans (a few states took that approach instead). People who purchased bronze or gold plans with the help of a premium subsidy may have after-subsidy rates are lower than they were in 2017, due to the larger premium subsidies.
Some states waited until CSR funding was officially eliminated before they allowed insurers to add the cost to premiums for 2018, and other states had back-up plans in place, given the uncertainty. But the Louisiana Department of Insurance confirmed in September 2017 that there was no contingency plan in place in Louisiana to allow insurers to refile new (lower) rates if CSR funding had been allocated. The rates that were filed were based on the (correct) assumption that CSRs would not be funded, and were slated to take effect (assuming the Department of Insurance deemed them justified, which they did) regardless of what might have happened with CSR funding.
The Department of Insurance noted that if CSR funding had ultimately been allocated in 2018 by the federal government (which did not happen), the situation would have been worked out via the medical loss ratio rebates. If CSR funding had been allocated, the rates for 2018 would have been too high in Louisiana, and would result in the insurers spending less than 80 percent of premiums on medical costs. To fix the problem, the amount that was overcharged would have been rebated to enrollees, although rebate checks based on 2018 coverage wouldn’t start to be sent to plan members until the fall of 2019 (rebates sent in the fall of 2019 would be based on insurers’ average medical loss ratios from 2016-2018).
None of this proved to be an issue, as Congress did not allocate funding for CSR in 2018. But Louisiana’s approach is in contrast to Washington’s where the state was prepared to actually change insurance rates mid-year if CSR funding had been allocated.
Legislation enacted to allow brokers to charge fees
In April 2017, the Louisiana House of Representatives passed H.B.407 almost unanimously, by a 94-3 vote. In May, the Senate passed it, 32-4, and the Governor signed it into law in early June. The measure allows insurance brokers in the individual market to charge fees — paid by consumers — in trade for their assistance. The practice of charging broker fees is currently banned under Louisiana law (as is the case in most states), because the general wisdom has long been that brokers receive adequate compensation via commissions from insurance companies.
But the ACA has resulted in sharply lower commissions in the individual market. This began in 2011 when the medical loss ratio rules went into effect, limiting individual market insurers’ administrative costs (including broker commissions) to no more than 20 percent of premiums collected. And in the years since insurers began offering ACA-compliant plans, plans have struggled to make a profit with the sicker-than-expected risk pool in the individual market, which is now guaranteed-issue, regardless of applicants’ medical history. Insurers have sharply scaled back broker commissions, and in some areas — like the entire state of Connecticut, for example — insurers no longer pay broker commissions at all for on-exchange plans (note that Connecticut’s state-run exchange is requiring insurers to pay broker commissions for 2018).
H.B.407 allows brokers to set their own fees, and does not limit them — lawmakers assume that the free market would do its work, with consumers gravitating to brokers that offer the best overall value in terms of service and fees. But brokers would have to disclose their fees to prospective clients, and would have to inform them that they could avoid the broker fee by using a navigator or HealthCare.gov (navigators are not licensed insurance producers, and are therefore not allowed to provide the sort of specific plan recommendations that brokers can provide; funding for the navigator program has also been sharply cut under the Trump Administration, and a week after the 2016 funding had run out, the reduced 2017 funding had not yet been distributed).
Legislation enacted to provide additional transparency for out-of-network charges
The Louisiana House of Representatives also passed H.B.435 in May, by a vote of 92-1, and sent it to the Senate, which approved it by a vote of 36-1. The Governor signed the legislation in June, and it took effect August 1, 2017. The new law helps to create transparency around the situation that arises when patients go to a hospital that’s in their insurance network, and are treated by health providers who aren’t in the patient’s insurance plan network. Many consumers aren’t even aware that this circumstance can arise at in-network hospitals, and the resulting “surprise balance bill” catches people off guard.
New York took steps in 2015 to protect insureds on state-regulated plans from being subject to surprise balance bills, but by and large, this is still a significant problem in most states. Louisiana’s H.B.435 is all about informing patients, but it does not protect them from receiving balance bills from out-of-network providers who perform services at in-network facilities.
The legislation includes disclosure language that must be provided to patients, along with a list of all the providers who perform services at the hospital. It is then up to the patient to confirm whether those providers are in-network. But in some scenarios, there’s no way to avoid being treated by an out-of-network provider — for example, if you need anesthetic for surgery, and the only anesthesiologist on duty isn’t in your plan’s network.
Louisiana’s Congressional delegation and health care reform
In January 2017, Louisiana Senator Bill Cassidy (R), along with Senator Susan Collins (R, Maine) introduced the Patient Freedom Act (S.191). The PFA was more of a compromise than other repeal/replace proposals, as it would have allowed states the option of keeping the ACA as-is, or switching to a new system outlined in the PFA. Under the PFA, uninsured residents would have been auto-enrolled in high-deductible health plans, with federal contributions to Roth HSAs for eligible individuals (funding would come from money that would otherwise have been used for ACA premium subsidies, cost-sharing subsidies, and Medicaid expansion). States would also have had the option of setting up their own rules, but without federal funding.
The Cassidy-Collins bill did gain much traction, but a similar proposal — dubbed Cassidy-Graham-Heller after senators Cassidy, Lindsey Graham (R, South Carolina), and Dean Heller (R, Nevada), who drafted it — had garnered more support by late summer. By September, however, it appeared that lawmakers were reluctant to revisit a major overhaul of Obamacare during the current session, and the Cassidy-Graham-Heller bill did not reach a vote in the Senate.
2017 enrollment: Medicaid expansion means fewer people enrolled in private plans
143,577 people enrolled in private plans through the Louisiana exchange during 2017 open enrollment (November 1, 2016 to January 31, 2017). This was significantly lower than the 214,148 people who enrolled in private plans during the 2016 open enrollment period, but that’s due mostly to the fact that Louisiana expanded Medicaid as of mid-2016.
People with household income between 100 percent and 138 percent of the poverty level were eligible for premium subsidies and cost-sharing subsidies in the exchange during the 2016 open enrollment period, but they became eligible for Medicaid instead in July 2016, and did not need to enroll in private plans during the 2017 open enrollment period.
UnitedHealthcare exited exchange at the end of 2016
At the end of 2016, UnitedHealthcare exited the individual market in Louisiana, as was the case in most states where United offered exchange plans in 2016 (United is continuing to offer off-exchange small group plans in Louisiana). United insured about 13 percent of the people who enrolled in exchange plans in Louisiana for 2016. They had to switch to plans offered by other carriers for 2017.
2017 rates and carriers
- Blue Cross Blue Shield of Louisiana: 41 percent (59,246 people enrolled as of March 2016; initial proposals averaged about 28 percent, varying slightly for Blue Max versus Blue Saver, but the carrier later filed new rates that averaged 41 percent; the final rate proposal was found to be not unreasonable).
- HMO Louisiana: Average rate increases vary for Blue POS Individual, Blue Connect POS Individual, and Community Blue POS. The averages ranged from 23.43 percent to 29.97 percent. HMO Louisiana had 74,940 members as of early/mid-2016.
- Humana: 29.5 percent. (30,901 members as of early/mid 2016; all members will need new coverage for 2018, as Humana is exiting the individual market at the end of 2017)
- Vantage Health Plan: 31.47 percent.
Louisiana’s Insurance Commissioner published a “Commissioner’s Column” notice in October 2016, noting that rates would be rising. The notice explained that while Louisiana officials don’t have the authority to reject rate increases, they can deem them justified or unjustified. Ultimately, the final rate proposals for all four exchange carriers were deemed justified based on actuarial evidence.
Since benchmark premiums increased by an average of 17 percent, larger subsidies are offsetting some of the rate increases for 2017. But it was essential for enrollees to shop around during open enrollment, as the overall average rates increased by more than 17 percent. As of March 2016, 92.6 percent of Louisiana exchange enrollees were receiving subsidies. These folks were insulated from the full brunt of the rate hikes for 2017.
214k enrolled for 2016
During the 2016 open enrollment period, 214,148 people enrolled in private health plans through the Louisiana exchange, including renewals and new enrollees. To put the total in perspective, enrollment was 186,277 by the end of the 2015 open enrollment period; Louisiana’s exchange enrolled 15 percent more people in 2016, despite the fact that 2016 was the first year that HHS began subtracting unpaid and canceled enrollments in real-time, while open enrollment was on-going. In prior years, they waited until open enrollment had ended to account for attrition.
184,403 people had effectuated coverage in the Louisiana exchange by March 31, 2016, as some enrollees never paid their initial premiums. A year prior, the effectuated enrollment total stood at 149,954.
89 percent of the Louisiana residents who enrolled in coverage for 2016 during open enrollment qualified for premium subsidies. Their average pre-subsidy premium was $448 per month, but after subsidies, their average premium was just $86 per month. By March 31, nearly 93 percent of effectuated enrollees in the Louisiana exchange had premium subsidies, as people without subsidies were more likely to not effectuate their coverage. At that point, the average premium subsidy in Louisiana was $362 per month.
CO-OP closed at the end of 2015
In July 2015, the Louisiana Health Cooperative, an ACA-created CO-OP, announced that it would not participate in the 2016 period, and that existing policies would terminate at the end of 2015. Louisiana Health Cooperative was only the second CO-OP to fail (after CoOpportunity in Nebraska and Iowa), but ultimately ten more CO-OPs closed their doors by the end of 2015.
The CO-OP reassured its 16,000 members that they had enough capital on hand to fulfill obligations and pay claims incurred through the end of 2015. The Louisiana Department of Insurance posted an FAQ section regarding the CO-OP’s announcement, and reminded enrollees that they had to select a new plan between November 1 and December 15 (technically December 31 if they opted to enroll using a special enrollment period triggered by loss of coverage) in order to have continuous coverage with a new plan effective January 1.
2016 rates and carriers
There were six carriers that offered individual coverage in the Louisiana exchange in 2015, but the CO-OP’s exit reduced the number of participating carriers to five in 2016.
In the Louisiana exchange, two individual market carriers requested rate increases of ten percent or more for 2016: HMO Louisiana, and Louisiana Health Service & Indemnity (Blue Cross Blue Shield of Louisiana). For both carriers, the rates were finalized as-requested. But other carriers also proposed double digit rate hikes in the small group market and outside the exchange, and some were adjusted prior to final approval.
Louisiana Health Cooperative had requested rate increases of about 23 percent, but those no longer apply, since the CO-OP is not offering plans in 2016. Time Insurance Company’s requested 55 percent rate hike was eye-catching, but they only sold plans outside the exchange in 2015, and they exited the insurance market nationwide at the end of 2015.
The Louisiana Department of Insurance published proposed and final rate changes for all of the carriers in their individual and small group markets, including on and off-exchange carriers. The filings were separated based on whether the proposed rate change was greater than or less than ten percent, but individual and small group plans were not separated (you can tell whether a plan is individual or small group by viewing the rate filing on the far right side of the spreadsheet). Nearly all of the proposed rate hikes under ten percent were for small group plans (Healthcare.gov now also shows requested and approved rate changes for all plans, including those with proposed rate increases of less than 10 percent; those were not available prior to open enrollment).
Most of the filings were approved as-proposed or with minor changes, but there were some significant changes for plans sold outside the exchange. Humana’s proposed rate increase of 14.8 percent was chopped down to 6.4 percent, and Aetna’s proposed 21 percent rate hike was increased to 29 percent.
At ACAsignups, Charles Gaba estimated the weighted average rate increase to be about 15.4 percent for the individual market in 2016, but that was before the rates had been approved. For plans sold in the exchange however, it didn’t matter, as the final rates were virtually all the same as the requested rates:
- Blue Cross Blue Shield of Louisiana: average rate increases ranged from 14.57 percent to 19.68 percent.
- HMO Louisiana: average rates increase of just under 12 percent
- Humana: average rate increase of 4.26 percent (slightly lower than the 5.79 percent increase Humana requested).
- UnitedHealthcare: I’m estimating 9 percent based on quotes I got for identical UnitedHealthcare plans in 2015 and 2016 using Healthcare.gov.
- Vantage Health Plan: 6.81 percent rate increase
HHS released a report in October detailing benchmark plan premium changes for 2016. The benchmark plan is the second-lowest-cost-Silver plan, but it’s not necessarily offered by the same carrier from one year to the next. In Louisiana, the average benchmark premium increase was 8.6 percent for 2016. Since subsidies are tied to the benchmark plan premium, a more expensive benchmark plan results in higher subsidies. But it was – as always – vitally important that enrollees shop around during open enrollment, as rate changes for 2016 varied significantly from one carrier to another.
Medicaid expansion by executive order
Former Governor Bobby Jindal staunchly opposed Medicaid expansion under the ACA, and refused to accept federal funding to expand coverage to adults with income up to 138 percent of the federal poverty level. As a result, Louisiana was among 20 states that were still refusing Medicaid expansion as of the end of 2015.
But in November 2015, John Bel Edwards was elected governor of Louisiana; he took office in January 2016. During the campaign, Edwards noted that one of his first priorities as governor would be Medicaid expansion, and true to his word, he signed an executive order on his second day in office, expanding Medicaid in Louisiana.
Louisiana passed House Concurrent Resolution 75 in 2015, which allows hospitals to generate revenue – via a new fee – to pay the state’s portion of the cost of expanding Medicaid. HCR75 gave Edwards until April 1, 2016 to propose a plan to expand Medicaid, but he did so much sooner than that.
The state expects about 375,000 people to gain coverage under expanded Medicaid, adding to the 1.07 million current Medicaid enrollees in Louisiana. Nearly 200,000 people in Louisiana were previously in the coverage gap – they had been locked out of Medicaid, and were also not eligible for subsidies in the exchange because their income was below the poverty level. That changed as of July 1, 2016, when Medicaid expansion took effect in Louisiana (enrollment began June 1, but the earliest coverage effective date was July 1).
Louisiana’s Department of Health and Hospitals used SNAP (food stamp) data to auto-enroll an estimated 105,000 Louisiana residents in Medicaid when the new eligibility guidelines took effect. Several states have used SNAP data to automatically enroll people in expanded Medicaid, but Louisiana is the first state to obtain HHS approval to use SNAP data to verify eligibility for Medicaid automatically for both the initial enrollment and ongoing annual renewals (the other states have only used auto-enrollment for the initial enrollment).
As of May 2016, the state’s Medicaid program has been renamed “Healthy Louisiana.” Previously, Louisiana Medicaid was known as Bayou Health. By August 2016, Louisiana had enrolled 74 percent of the newly-eligible population. By February 2017, enrollment in expanded Medicaid had reached 398,193 — surpassing the state’s total projected enrollment in under eight months.
186,277 Louisiana residents selected qualified health plans (QHPs) through the marketplace during 2015 open enrollment, including the week-long extension that was added at the end of open enrollment. But not all of them paid their initial premiums, and some people cancelled their coverage in the early days of 2015. By the end of March, 149,954 people in Louisiana had in-force coverage through the exchange. Effectuated enrollments dropped again during the second quarter of 2015, to 141,740. Almost 91 percent of enrollees were receiving premium subsidies, and 58 percent were receiving cost-sharing subsidies.
Initial 2015 enrollment was about 83,000 higher than 2014 enrollment. However, Louisiana residents signed up at a slower rate than individuals across the nation. About 35 percent of eligible Louisiana residents signed up for coverage through the marketplace compared to about 41 percent nationally.
Rates and carriers for 2015
The number of insurance companies selling through the marketplace in Louisiana grew from five to six for 2015 coverage according to the U.S. Department of Health and Human Services. UnitedHealthcare, the nation’s largest health insurance company, joined the marketplace in Louisiana and about 20 other states. United took a very conservative approach in 2014, participating in just five states.
The Commonwealth Fund analyzed premiums and deductibles across all the metal tiers, differences in premiums between urban suburban and rural areas, and insurer participation in nearly all states. For Louisiana, the analysis showed premiums up 12 percent on average from 2014 to 2015. In contrast, the analysis showed a 0 percent change in premiums nationally. According to another study by the Commonwealth Fund, premiums in state individual insurance markets rose an average 10 percent or more each year from 2008 to 2010.
Small group plans
The SHOP exchange in Louisiana provides health insurance plans for businesses with up to 50 employees. Under the ACA, the definition of “small group” was scheduled to expand in 2016 to include businesses with up to 100 employees. But that changed in October 2015 when President Obama signed HR1624 (the PACE Act) into law, repealing the definition change for small groups. Under HR1624 States are free to independently define small groups as businesses with up to 100 employees, but most states have continued to define small groups as businesses with up to 50 employees in 2016.
In Louisiana, the state had already codified into law the definition change, mirroring what was in the ACA. But after HR 1624 was signed into law, the Louisiana Department of Insurance issued transitional relief, allowing carriers and businesses in the state to use the definitions in the PACE Act for 2016, rather than requiring businesses with 51 – 100 employees to become part of the small group market. It’s possible that the state could enact legislation to make that transitional relief permanent during the 2016 legislative session.
Paying more for NOT being covered
Penalties, like premiums, are rising. If you don’t qualify for exemption and don’t have health insurance in 2016, you’ll owe a penalty when you pay your 2016 taxes. 2016 penalties are the greater of:
- 2.5% of annual household income. The penalty can never exceed the national average cost for a bronze plan. The IRS announced in Revenue Procedure 2015-15 that the maximum 2015 penalty would be $2,484 for a single individual and $12,420 for a family of five or more. It will be a little higher in 2016, but the cap would only apply to very wealthy households.
- $695 per adult or $347.50 per child under 18. The maximum penalty under this method will be $2,085.
Although there were still 33 million uninsured people in the US in 2014, the IRS reported that just 7.5 million tax filers were subject to the penalty in 2014 (out of more than 138 million returns). According to IRS data, 12 million filers qualified for an exemption (you can see a list of exemptions here).
2014 enrollment recap
During 2014 open enrollment, 101,778 Louisiana residents signed up for a qualified health plan (QHP). Eighty-eight percent of QHP enrollees received financial assistance, and their average monthly premium after subsidies was $83 according to a federal report.
More than 17 percent of Louisiana residents were without health insurance in 2014.
In early 2014, the Urban Institute estimated that Louisiana’s enrollment in the marketplace would reach 305,000 in 2016. That appears to be on the high side however, as enrollment stood just shy of 215,000 at the end of the 2016 open enrollment period. Enrollment in the exchanges is lower nationwide than had been predicted, partially due to the fact that the anticipated drop in employer-sponsored coverage has not materialized.
ACA and exchange implementation in Louisiana
Louisiana is among the 26 states that left all responsibility for its health insurance marketplace to the federal government. Former Gov. Bobby Jindal repeatedly rejected a state-run exchange and even returned a $1 million federal planning grant. He also refused to expand Medicaid under the ACA, although newly-elected Governor John Bel Edwards has reversed Jindal’s position on Medicaid expansion, and eligibility is expected to be expanded in mid-2016.
Jindal’s decision against Medicaid expansion in 2014 and 2015 affected not only uninsured individuals, but also Louisiana healthcare providers and its overall economy. The state provided $18 million in stopgap funding in late August 2014 when Baton Rouge General Mid City Hospital announced it would close its emergency room due to the expense of providing uncompensated care for the uninsured. Despite the infusion, the emergency room shut down in March 2015. An Urban Institute study says Louisiana would lose out on $15.8 billion in funding between 2013 and 2022 by not expanding Medicaid, while contributing $5.7 billion in taxes over the same period that will be used states that have expanded.
With Governor Edwards’ executive order to expand Medicaid, the state will begin receiving federal funding to cover the cost of expansion.
Louisiana health insurance exchange links
State Exchange Profile: Louisiana
The Henry J. Kaiser Family Foundation overview of Louisiana’s progress toward creating a state health insurance exchange.
Louisiana Department of Insurance, Office of Health Insurance
Assists consumers who have purchased insurance on the individual market or who have insurance through an employer who only does business in Louisiana.
(225) 219-4770 / Toll Free: (800) 259-5301