Louisiana uses the federally-facilitated exchange, so residents use Healthcare.gov to enroll in exchange plans.
The average benchmark premium (second-lowest-cost silver plan) increased by 17 percent in Louisiana in 2017. Subsidy amounts are based on the cost of the benchmark plan relative to income, so subsidies are larger in 2017 than they were in 2016.
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).
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.
House overwhelmingly passes bill to allow brokers to charge fees
In late April, the Louisiana House of Representatives passed H.B.407 almost unanimously, by a 94-3 vote. It is currently with the Senate, where it was approved in May by the Committee on Insurance. The measure would allow insurance brokers in the individual market to charge fees — paid by consumers — in trade for their assistance. This practice 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.
H.B.407 would allow brokers to set their own fees, and would 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 any specific plan recommendations).
House also overwhelmingly passes bill to provide additional transparency on 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. This bill 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.
Looking ahead to 2018: Louisiana exchange and the Trump Administration
Open enrollment for 2018 coverage will be significantly shorter than it has been in prior years. It will run from November 1, 2017 to December 15, 2017, and all plans will be effective January 1, 2018.
Insurers that wish to offer 2018 plans in Louisiana have to submit rates and forms by June 2, 2017. After that, the filings will be publically available on the Louisiana Department of Insurance website.
House Republicans passed their version of the American Health Care Act (AHCA) in May 2017. The nonprofit Louisiana Budget Project estimates that 466,500 people in Louisiana would lose their health insurance over the coming decade if the AHCA were to be implemented, but the legislation is likely to undergo significant changes in the Senate, which is said to be writing their own version of the bill.
Louisiana’s recent expansion of medicaid in mid-2016 means that the state would be particularly hard-hit by ACA repeal. In 2016, nearly 93 percent of Louisiana exchange enrollees were receiving subsidies. That number is lower now that Medicaid expansion has taken the lowest-income enrollees out of the private insurance pool, but 86 percent of Louisiana exchange enrollees were receiving subsidies as of the end of the 2017 open enrollment period. At that point, 123,749 people in Louisiana had subsidies offsetting at least a portion of their premiums. On average, those subsidies reduce their premiums from $552/month to $177/month. As of May 2017, there were also more than 428,000 people in Louisiana who were covered under the state’s Medicaid expansion that took effect in 2016 — an increase of 30,000 people since February 2017.
In January 2017, Louisiana Senator Bill Cassidy (R), along with Senator Susan Collins (R, Maine) introduced the Patient Freedom Act (S.191). The PFA is more of a compromise than other repeal/replace proposals, as it would allow states the option of keeping the ACA as-is, or switching to a new system outlined in the PFA. It would involve auto-enrolling uninsured residents in high-deductible health plans, and 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 the option of setting up their own rules, but without federal funding. The Cassidy-Collins bill was still in committee as of May, but the idea of auto-enrollment in health coverage was starting to gain traction.
Humana will exit 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 will exit the individual market nationwide at the end of 2017. Louisiana is one of 11 states where they still offer individual market plans, but those plans will no longer be available in 2018.
On February 15, HHS (under the leadership of newly-confirmed Secretary Tom Price) published proposed regulations to stabilize the individual health insurance market. Final regulations will be coming in the spring, and it’s too soon to say whether the efforts at market stabilization will be enough to prevent other health insurers from leaving the individual market.
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 taxfilers 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 materializ,ed.
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