As annual enrollment approaches for the individual health insurance marketplace, customers looking for policies in Louisiana will likely fare better than those in many other states.
Federal data released by the Centers for Medicare and Medicaid Services last week provide the first official glimpse of what premiums look like in all the states using healthcare.gov, the federally run portal for Affordable Care Act policies. For the first time since the Affordable Care Act was rolled out, premiums are dropping, CMS said of what is commonly known as "Obamacare."
Premiums analyzed by CMS will be lower in Louisiana than in most other states, and Louisiana will see a larger drop from last year compared with the 38 other states using healthcare.gov.
After years of double-digit rate hikes, experts say Louisiana’s market may finally be showing signs of stabilizing, a trend seen in dozens of other states across the country this year. The drop in rates comes after the state’s insurers, mainly Blue Cross, posted a profit in the individual exchange last year.
“Barring any ugly surprises … then, yes, I’d say we’re looking at a much more stable, predictable performance from that block of business,” said Mike Bertaut, health care economist and exchange coordinator for Blue Cross and Blue Shield of Louisiana.
But for the second year in a row, the enrollment period, starting Nov. 1, comes amid significant changes to the health care law. The individual mandate requiring people to buy health insurance or pay a penalty goes away Jan. 1. Some critics say new Trump administration policies expanding short-term plans and creating association health plans that give small businesses the opportunity to band together to buy health coverage will poach healthy people from the individual market.
An ongoing lawsuit by 20 Republican attorneys general, including Louisiana's Jeff Landry, argues components of the law, including coverage for pre-existing conditions, should be struck down.
Despite all that, the Louisiana Department of Insurance announced this summer that Louisiana’s individual market will experience its first drop in premiums — by 6.4 percent — since the Affordable Care Act debuted.
Last week's CMS report suggests Louisiana’s market is doing better than those in other states.
The figures look at premiums for a 27-year-old single nonsmoker, and show a 1.5 percent drop in premiums for the second-lowest-cost silver plan and a 1 percent drop for the lowest-cost plan. That represents the first drop in "Obamacare" premiums since the health law rolled out. In Louisiana, those premiums are dropping by 5.1 percent for the second-lowest-cost plan and 7 percent for the lowest-cost plan.
That translates to a $372 monthly premium for the second-lowest-cost silver plan for such a person in Louisiana, $34 less than the national average. For the lowest-cost plan, the same person will pay $280, which is also slightly lower than average.
Most people in Louisiana’s individual market get subsidies from the federal government to offset the cost of coverage. The amount of aid depends on how much money someone makes.
Those premium costs will be higher for older people, but Bertaut said they line up with what he would expect to see here. The individual market is still slightly older — about 40 years old — than the average age of 35 in Louisiana, something that makes costs more expensive. Still, premiums will drop by anywhere from 5 percent to 15 percent. Some consumers may still see increases because rates rise with age, but on average, the state's rates are falling.
Frank Opelka, deputy commissioner of health, life and annuity at the insurance department, said the figures represent a more narrow population than the state numbers released in August. But the CMS report aligns with the trend the department is seeing, he said.
“The national picture heading into the Nov. 1 open enrollment period is one of relative stability,” Opelka said. “It’s far too early to draw conclusions about whether this market’s historic turbulence is beginning to wane, however.”
Aside from premiums, Bertaut said the number of people enrolling in the individual marketplace should also be relatively stable. Enrollment in an expanded Medicaid has stabilized, and even though the individual mandate was repealed by Congress, he doesn’t expect a huge exodus of people from the individual market.
However, navigators helping people find policies will again have less funding than during the Obama years. Brian Burton, director of Southwest Louisiana Area Health Education Center, said despite the cut, which went into effect last year and continued this year, his group will have navigators throughout the state helping people find the right policies.
“I don’t know what to expect,” Burton said of the enrollment period this year.
The individual mandate will no longer require people to get insurance, Burton said, but many people already paid the penalty and went without insurance, instead of buying individual policies.
As premiums rose by double-digits in recent years, those feeling the brunt of the pain were people who made too much money to get tax credits and had to pay the full freight for individual policies. Most were self-employed people who didn’t get insurance from their job.
The Trump administration this year expanded access to short-term health plans and association health plans, a move critics said would undermine the Affordable Care Act markets and draw healthier people out of the individual market. Short-term plans can now be used for up to three years in some cases, and are much cheaper than "Obamacare" plans on average.
If healthier people leave the individual market, the customer base left behind will be much sicker people on average, making it more expensive to insure and driving up rates.
Burton said it is important people realize the short-term plans don’t cover everything the other plans do — which is why they are so much cheaper.
“The No. 1 thing I want consumers to know is what they’re getting when they buy these short-term plans," he said.
Blue Cross filed three short-term plans this year, at rates that are between 40 percent and 60 percent cheaper than Affordable Care Act plans, Bertaut said. Ten other insurers are offering such plans, and Bertaut said Blue Cross’ plans will still offer solid coverage and are designed as a bridge for people to get to the next enrollment period, which has traditionally been the role of such plans.
Ronnell Nolan, president and CEO of Health Agents for America, said the reduction in premiums in Louisiana, while a good sign, is still only a small dent in the cost for many people who don’t get subsidies to offset the costs.
“Until the cost of health care is addressed, consumers are not really getting a whole lot of help,” she said. “On its surface, it looks like maybe things are settling down. The rates are still just too expensive.”
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