Highlights and updates
- Open enrollment for 2020 health plans has ended, although residents with qualifying events can still enroll or make changes to their coverage for 2020. The next open enrollment period, for plans effective in 2021, will begin November 1, 2020.
- Louisiana has enacted legislation to codify ACA consumer protections if the ACA is overturned… while also backing the lawsuit that seeks to overturn the ACA.
- Short-term health plans can be sold in Louisiana with initial plan terms up to 12 months.
- 2020 rates and plans: Christus joined the exchange; existing insurers raised average rates by nearly 12% (but benchmark premiums increased too, so subsidies grew to keep up with the rate increases).
- Lawmakers considered – but rejected – reinsurance to stabilize individual market
- Enrollment peaked in 2016, but had dropped to a record low by 2020. The decrease is partially due to Medicaid expansion, which covered more than 456,000 people as of late 2019.
- 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.
Open enrollment for 2020 health plans has ended, although residents with qualifying events can still enroll or make changes to their coverage for 2020. The next open enrollment period, for plans effective in 2021, will begin November 1, 2020.
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 (more than 456,000 people were enrolled in Louisiana’s expanded Medicaid program as of December 2019).
Premium subsidies — used by 90 percent of Louisiana exchange enrollees — grew significantly larger in 2018, due in large part to the fact that cost-sharing reduction (CSR) funding was eliminated by the federal government, and the cost of CSR is now added to silver plan rates.
But for 2019, subsidies were a little smaller, because average premiums, including average benchmark premiums, were lower than they were for 2018 (the average subsidy amount was $525/month in 2018, and dropped to $497/month in 2019). Average benchmark premiums in Louisiana grew for 2020, however (in contrast with an average reduction across all the states that use HealthCare.gov), so subsidies have grown again.
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. Several states have already taken this approach, But the Louisiana bill that would have authorized state funding for the reinsurance program did not succeed. So although the state had already posted a draft 1332 waiver proposal, it did not end up being submitted to CMS.
But Louisiana has enacted various ACA consumer protections into state law, and is working to establish parameters for an invisible risk-sharing program that could be used to keep health insurance premiums affordable if the ACA were to be overturned in the Texas v. Azar/US case (Louisiana is one of the plaintiff states in that case, working to overturn the ACA).
New state law codifies ACA consumer protections (but funding is a stumbling block) despite the fact that Louisiana is one of the states fighting in court to overturn the ACA
Louisiana enacted legislation in 2019 (SB173/Act412) that codifies a variety of ACA consumer protections into state law in the event that the ACA is struck down in the Texas v. Azar/US lawsuit. If the ACA is overturned, Louisiana’s law calls for plans to continue to be guaranteed-issue (regardless of medical history) and include coverage for the essential health benefits. Plans would be able to use a 5:1 age-based rating ratio (as opposed to the ACA’s 3:1 ratio), but would not be able to place dollar caps on lifetime or annual benefits.
The legislation contains a significant catch however, in that it notes that the various consumer protections (such as guaranteed-issue coverage and essential health benefits mandates) would only continue to apply if premium subsidies continue to be available from the federal government, or in a similar amount from the state government.
That latter option is unlikely, given the amount of funding that would be needed, but the law tasks Louisiana’s Insurance Commissioner with establishing the Louisiana Guaranteed Benefits Pool, which would be a risk-sharing program that would cover some of the cost of insuring people with high-cost health care needs in the individual market. This concept is often referred to as “invisible risk-sharing” and it’s the basic concept behind reinsurance, which several states have established (Louisiana is interested in the model that Maine uses). If the ACA were to be overturned in full, premium subsidies would disappear, as would federal funding for Medicaid expansion. But Louisiana is working on an actuarial analysis of an invisible risk-sharing program, which will be presented to state lawmakers no later than March 1, 2020.
After Act 412 was enacted, Louisiana’s Attorney General, Jeff Landry, praised its passage, saying that “Louisiana has now become the country’s leader in protecting patients with pre-existing conditions.” While there are several states that had enacted similar legislation well before Louisiana, the great irony in Landry’s comment is that he is among the plaintiffs in the lawsuit that seeks to overturn the ACA. Without the looming threat of Texas v. US — in which Louisiana is arguing that the ACA is unconstitutional — there would be no need for states to scramble to enact their own laws, with woefully inadequate funding, in an effort to protect people with pre-existing conditions.
West Virginia’s attorney general is also a plaintiff in Texas v. Azar, and is now backing similar legislation in West Virginia.
Double-digit rate increases for 2020, plus a new insurer in the exchange
Open enrollment for 2020 individual market health coverage in Louisiana began November 1 and ended December 15, 2019, with all plans effective January 1, 2020. Residents with qualifying events may still be able to enroll in a plan for 2020, depending on the circumstances.
Louisiana’s exchange has four insurers offering plans (two are part of the same parent company), including newcomer Christus Health Plans, which joined the exchange in the Shreveport/Bossier, Lake Charles, and Alexandria areas (off-exchange plans are available in the “entire western third of the state”). Christus already had “an established hospital and primary care presence” in these areas of the state, so the introduction of their health plans was anticipated to be a good fit in those areas. This is the first time since 2015 (when UnitedHealthcare joined the exchange) that Louisiana’s exchange has had a new insurer join the market.
Christus Health Plans previously offered exchange plans in Texas and New Mexico, but they stopped offering coverage in New Mexico at the end of 2019, after failing to meet the state’s QHP certification requirements. So as of 2020, Christus plans are available in Louisiana and Texas, but not in New Mexico.
For 2020, Louisiana is one of just three states (the other two are Indiana and Vermont) where average premiums increased by double-digit percentages. Louisiana’s exchange insurers have implemented the following average rate changes:
- Blue Cross Blue Shield of Louisiana (Louisiana Health Service and Indemnity Company): roughly a 10.7 percent increase, although it varies by plan.
- HMO Louisiana (a subsidiary of Blue Cross Blue Shield of Louisiana): roughly a 12.3 percent increase, although it varies by plan.
- Vantage Health Plan: roughly a 5.5 percent increase, although it varies by plan (Vantage’s filing noted that they were planning to consolidate their plan offerings in 2020; they offered 5 bronze plans, 15 silver plans, 5 gold plans, and 2 platinum plans in 2019, but in 2020 they have 3 bronze plans, 3 silver plans, and 1 gold plan).
- Christus Health Plans: New to Louisiana’s market, so no applicable rate change.
At ACA Signups, Charles Gaba calculated an average rate increase of about 11.7 percent for Louisiana’s individual market. The rates were reviewd by the Louisiana Department of Insurance. As is the case in many states, Louisiana officials don’t have the authority to reject rate increases, they can only deem them justified or unjustified. The state conducts actuarial justification reviews for any proposed rate increases of 15 percent or more (this threshold was 10 percent prior to 2019). Rate filings are publicly available on the Louisiana Department of Insurance website.
Average rate changes in previous years
For perspective, here’s a look at how premiums have changes in Louisiana’s exchange since ACA-compliant plans debuted in 2014:
2015: Average increase of 12 percent
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.
2016: Average increase of 15.4%
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 (Louisiana Health Cooperative had requested rate increases of about 23 percent, but the CO-OP stopped offering coverage 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. For the insurers that offered plans in the exchange in 2016, rate increases ranged from just over 4 percent for Humana, to 15-20 percent for BCBSLA.
2017: Average increases ranged from 23% to 41%
Average rate increases were steep for 2017, as was the case in most states. In Louisiana, BCBSLA increased premiums by an average of 41 percent, HMO Louisiana increased rates by 23-30 percent, Humana increased rates by an average of 29.5 percent, and Vantage Health Plan increased premiums by an average of 31.5 percent.
2018: Average increase of 21.4%
On average, Louisiana rate increases would have been in the single digits (a little over 7 percent) if cost-sharing reduction (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.
Because the cost of CSR was added to silver plan rates, 2018 premium subsidies in Louisiana were 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 have resulted in the insurers spending less than 80 percent of premiums on medical costs. To fix the problem, the amount that was overcharged would have eventually been rebated to enrollees.
2019: Average decrease of 6.4%
In August 2018, 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.
That decrease came despite the fact that rates were 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. At ACA Signups, Charles Gaba estimates that premiums in Louisiana would have dropped by nearly 16 percent without those factors.
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, several states have since implemented reinsurance programs, and have seen either very small premium increases or premium decreases as a result.
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.
Insurer participation in Louisiana’s exchange: 2014-2020
In 2014, plans were available in Louisiana’s exchange from Louisiana Health Service and Indemnity Company (LHSIC), HMO Louisiana, Louisiana Health Cooperative (an ACA-created CO-OP), Humana, and Vantage Health Plans.
UnitedHealthcare joined the exchange in Louisiana for 2015, bringing the total number of participating insurers to six.
But in July 2015, the Louisiana Health Cooperative 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, and only four (out of an original 23) were still operational by 2019.
At the end of 2016, UnitedHealthcare also 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.
Humana announced on February 14, 2017, that they would exit the individual market nationwide at the end of 2017, so their plans were no longer available in Louisiana as of 2018. By 2018, coverage was only available from LHSIC, HMO Louisiana (both owned by the same parent company) and Vantage Health Plans. That continued to be the case in 2019, but Christus joined the exchange for 2020, bringing the total number of insurers back up to four.
Enrollment in Louisiana’s exchange: 2014-2020
Here’s a look at how enrollment (during open enrollment) in private plans in Louisiana’s exchange has changed over time:
2014: 101,778 people enrolled.
2015: 186,277 people enrolled.
2016: 214,148 people enrolled. Enrollment peaked in Louisiana’s exchange in 2016, as is the case in most states that use HealthCare.gov.
2017: 143,577 people enrolled. The drop in enrollment was 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.
2018: 109,855 people enrolled. 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 continued to grow, which was likely a big part of the reason that exchange enrollment declined sharply again for 2018. 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. 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.
2019: 92,948 people enrolled. A significant chunk of the drop-off is likely related to the state’s implementation of Medicaid expansion, but enrollment declines in 2019 can also be attributed to the elimination of the individual mandate penalty (via federal legislation) and the expansion of short-term health plans (via Trump Administration regulations).
2020: 88,224 people enrolled. Enrollment in Louisiana’s exchange is the lowest its ever been, and is down 58 percent from peak enrollment in 2016. But Medicaid expansion was covering more than 456,000 people as of late 2019. Before Medicaid was expanded in Louisiana, people with income between 100 and 138 percent of the poverty level were eligible for subsidies in the Louisiana exchange, whereas they’re now eligible for Medicaid instead.
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.
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 expected about 375,000 people to gain coverage under expanded Medicaid, adding to the roughly 1 million people who already had Medicaid or CHIP coverage 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. And by August 2019, enrollment in expanded Medicaid stood at more than 450,000 people.
ACA and exchange implementation in Louisiana
Louisiana is among the 26 states that initially 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 Governor John Bel Edwards reversed Jindal’s position on Medicaid expansion, and eligibility was expanded in mid-2016.
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