CO-OP closing its doors
On July 24, the Louisiana Health Cooperative, an ACA-created CO-OP, announced that it will not participate in the upcoming open enrollment period, and that current policies will terminate at the end of 2015. The CO-OP is reassuring its 16,000 members that they have enough capital on hand to fulfill obligations and pay claims incurred through the end of 2015.
The Louisiana Department of Insurance has posted an FAQ section regarding the CO-OP’s announcement, and is reminding current enrollees that they will need to select a new plan between November 1 and December 15 in order to have continuous coverage with a new plan effective January 1.
Looking to 2016
In the Louisiana exchange, four individual market carriers have requested rate increases of ten percent or more for 2016: HMO Louisiana, Humana, Louisiana Health Service & Indemnity (Blue Saver and BCBS of Louisiana) and Vantage Health Plan. Louisiana Health Cooperative had requested rate increases of about 23 percent, but those will no longer apply, since the CO-OP will not be offering plans in 2016. Other carriers have also requested double digit rate hikes in the small group market and outside the exchange.
Most of the proposed rate increases are in the range of 11 percent to 26 percent. Time Insurance Company’s requested 55 percent rate hike was eye-catching, but they only sold plans outside the exchange in 2015, and their parent company, Assurant, subsequently announced that they are exiting the individual market nationwide, and will not participate in open enrollment for 2016.
None of the rates have been finalized yet, and it will be several more weeks before we know if the rate proposals are approved. The state Department of Insurance has a memo on their website about rate filings, noting that rate increase requests of ten percent or more are scrutinized to make sure that they’re actuarially justified. But they also point out that in Louisiana, the Department of Insurance does not have approval authority over health insurance premiums.
Even if the proposed rates are implemented as proposed for 2016, the majority of Louisiana exchange enrollees receive subsidies to offset the cost of their coverage, and those subsidies will lessen the impact of any rate hikes. It will be important for enrollees to shop around during open enrollment (November 1 to January 31), since rate increase proposals vary considerably from one carrier to another; the plan that offered the best value in 2015 won’t necessarily be the plan that offers the best value in 2016.
King v. Burwell – subsidies are safe
The Supreme Court ruled in late June that subsidies are legal in every state, even if the federal government is running the exchange. The plaintiffs in King v. Burwell had argued that subsidies could only be provided by state-run exchanges, but the Court rejected that premise. As a result, subsidies are no longer in danger for 143,000 people in Louisiana, and they will continue to be available for new enrollees during the upcoming open enrollment period.
At ACAsignups, Charles Gaba estimated that if subsidies had been eliminated, unsubsidized average premiums in Louisiana would have climbed from $416/month in 2015 to $624/month in 2016. That’s for people who pay full price for their coverage. Most current enrollees in the Louisiana exchange have subsidies however, so the result for them would have been much more profound: Their rates would have jumped from an average current (after-subsidy) premium of $93/month to $624/month next year.
The Louisiana Department of Insurance confirmed that if the subsidies had been stuck down by the Supreme Court, carriers would have had two weeks to refile new (presumably much higher) rates for 2016. Fortunately for the residents, insurers, and medical providers of Louisiana, that didn’t come to pass.
More than 184,000 Louisiana residents selected qualified health plans (QHPs) through the marketplace during 2015 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.
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.
Special options for enrolling
While the 2015 open enrollment period is over, you may still be able to sign up if you meet one of the following conditions.
- You experience a qualifying event. You have 60 days from the date of the event to sign up for insurance.
- You are a Native American. You can sign up for health insurance at any time during the year.
- You qualify for Medicaid. Medicaid accepts applications throughout the year.
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. 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.
Paying more for NOT being covered
Penalties, like premiums, are rising. If you don’t qualify for exemption and don’t get health insurance in 2015, you’ll owe a penalty when you pay your 2015 taxes. 2015 penalties are the greater of:
- 2% of annual household income
- $325 per adult or $162.50 per child under 18
There are caps that limit penalty amounts. See HealthCare.gov for a list of exemptions and penalty caps.
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.
The Urban Institute estimates Louisiana’s enrollment in the marketplace will reach 305,000 in 2016.
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. Gov. Bobby Jindal repeatedly rejected a state-run exchange and even returned a $1 million federal planning grant.
Jindal also rejected Medicaid expansion in the state, a decision that leaves 34 percent of uninsured Louisiana adults in the coverage gap, so they can’t get help through Medicaid nor do they qualify for subsidies to purchase insurance through marketplace. According to the Kaiser Family Foundation, almost 242,000 Louisiana residents are shut out of both Medicaid and subsidies to purchase insurance through the marketplace.
The decision against Medicaid expansion affects 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 will close by early April 2015. An Urban Institute study says Louisiana is losing 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.
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