Health Overhaul Signups

The Healthcare.gov website is where people sign up for health insurance coverage on the federal exchange under the Affordable Care Act, known as Obamacare. Rates in Louisiana for 2019 are dropping an average 6.4 percent.

After seeing years of rate hikes, Louisiana residents getting health insurance through the Affordable Care Act’s individual exchange will see premiums drop in 2019 by an average of 6.4 percent.

The direction is an abrupt turnaround for the individual exchange, created under the ACA —commonly known as Obamacare — to offer insurance to people who don’t receive it through their jobs or other means. Until now, Louisiana’s individual market has weathered years of rising premiums, including a jump of 18.5 percent on average for 2018.

"I'm not yet ready to say the wolf is away from the door," said Louisiana Insurance Commissioner Jim Donelon. "It is encouraging."

Obamacare still faces potential headwinds. Unable to repeal much of Obamacare, the Trump administration has tried to undercut how it's supposed to work and to create options for people who don't qualify for financial assistance with premiums. That includes an announcement Wednesday expanding short-term health plans that provide far less health coverage but would be cheaper and could draw people who don't receive subsidies away from Obamacare.

More than 100,000 Louisianians get insurance through the individual exchange, and the majority receive federal subsidies to offset the cost. A smaller group not covered by subsidies feel the full weight of premium changes.

Blue Cross and Blue Shield of Louisiana, the state’s largest insurer, and Vantage Health Plan, a small, north Louisiana-based insurer, are the only insurers in the state left offering health plans on the individual exchange. 

Donelon pointed to the fact that both Blue Cross and Vantage made money in the individual exchange last year to explain the drop in Obamacare rates for 2019. Those insurers don't want to run afoul of federal rules that require them to spend 80 percent of their premium income on health care coverage. If more than 20 percent of their income goes to other expenses or profit, they would have to rebate the money to policyholders, which costs money to process and can be a public relations headache.

Still, the drop is only a small dent in the double-digit premium hikes that have driven up costs dramatically in recent years.

Rates unveiled Wednesday by the Louisiana Department of Insurance show declines in a range from about 4 percent to more than 15 percent, depending on the policy chosen. Premiums in the small group market will rise by 0.1 percent on average.

The drop in 2019 rates comes after Blue Cross posted a $59 million profit in the individual exchange in 2017. That profit halted a three-year, $200 million slide that brought double-digit premium hikes for policyholders.

“Blue Cross filed 2019 rates with the Louisiana Department of Insurance last month as required by law. Most of our individual members will receive decreases on their premium rates next year, while others will see small increases,” Blue Cross spokeswoman Cindy Wakefield said.

"The market has started to stabilize after a couple years of heavy increases," Vantage spokesman Billy Justice said. "Based on the current conditions, and the stabilization of our current membership, it warranted a slight decrease statewide." 

Vantage covers more than 10,000 people in the individual exchange. 

Before Blue Cross made money in the individual market last year, officials and health groups had worried the insurer, along with Vantage, might join others who have fled the market here, leaving the state without an insurer providing coverage.

“Blue Cross and Blue Shield of Louisiana is committed to our mission to improve the health and lives of Louisianians,” Wakefield said Wednesday. 

Ronnell Nolan, president and CEO of Health Agents for America, said it's still too early to tell what the rate reductions mean for the future of the market, but she called it a good sign. 

"The market has kind of settled down a bit," she said.

"Overall, the individual market under the Affordable Care Act is stabilizing on average," said Rabah Kamal, policy analyst at the Kaiser Family Foundation. "Insurers, after several years of big losses, are finally turning a healthy profit."

Rate changes have varied widely from state to state, and even from insurer to insurer, Kamal said. But a rate decrease "is not unheard of."

In some places, that has offset the forces working to raise premiums, which still could pose future problems for Obamacare.

One obstacle is the repeal of an individual mandate that requires people to have health insurance or face penalties. Congress killed the mandate, effective next year, opening the possibility of driving healthy people out of individual markets in many places and leaving Obamacare plans covering sicker, more expensive customers.

While some other states have seen insurers raise rates to offset a hit from the individual mandate going away, Donelon said Louisiana's insurers already priced that factor into this year's rates.

The Trump administration also announced Wednesday a final rule that paves the way for expanded short-term health plans, which came about under the Obama administration as a way to provide stopgap coverage to people.

The new rule will allow the plans to expand from three months to up to three years, leaving it up to insurers to offer the second- and third-year extension.

But the plans do not have to include the 10 essential health benefits mandated by the ACA —covering things like pre-existing conditions, maternity care, prescriptions and mental health. That allows insurers to sell them at lower prices — by some estimates a third of the cost.

Critics say the expansion of the short-term plans will lead to consumers buying cheaper, skimpy plans under the impression they will cover the same things ACA plans do. The plans could also undermine the ACA's individual exchange by siphoning healthier patients.

"Now that you’ve got these short-term plans that don’t cover the 10 essential health benefits … you’re now comparing apples to oranges," said Brian Burton, director of the Southwest Louisiana Area Health Education Center. "You really need to look at these plans and see what they cover and make sure you make the most informed decision and really do your research.”

Proponents say the cheap short-term plans will provide another option for people who have been priced out of the individual market.

Donelon said it is too early to say what the short-term rule means for Louisiana, but could provide a good option for people who have dropped out of the market. Donelon pushed for a reinsurance program that he said would have reduced premiums by double digits, but lawmakers shot it down. He said that program would have helped those people who were priced out.

"My greater concern is that category of working poor who have dropped out of the insurance market," he said.

On Wednesday, the Blue Cross Blue Shield Association, whose members are a mainstay of ACA coverage, was critical of plan. 

"The broader availability and longer duration of slimmed-down policies that do not provide comprehensive coverage has the potential to harm consumers, both by making comprehensive coverage more expensive and by leaving some consumers unaware of the risks of these policies," said Justine Handelman, of the Blue Cross Blue Shield Association

"We see that it's just unaffordable for so many people who are not getting subsidies and we're trying to make additional options available," Health and Human Services Secretary Alex Azar said of the plans. "These may be a good choice for individuals, but they may also not be the right choice for everybody."

Plans will carry a disclaimer that they don't meet the ACA's requirements and safeguards. And there's no federal guarantee short-term coverage can be renewed.

Follow Sam Karlin on Twitter, @samkarlin.