Despite lower premiums, the number of people enrolled in health insurance through the Affordable Care Act’s individual exchange in Louisiana fell sharply in 2019, reaching its lowest point since taking effect, as people migrated to other forms of insurance such as Medicaid through an expansion of that program through the ACA, as well as an improving economy that has given more people access to insurance through an employer.
But those using the individual exchanges and gaining coverage from the Medicaid expansion under the Affordable Care Act again found the insurance under attack Tuesday, with the Trump administration telling a New Orleans appeals court that the health law should be thrown out entirely. While the Trump administration has taken several steps to undermine the Affordable Care Act, the move was the most dramatic effort yet to end former President Barack Obama’s signature health care law.
The Affordable Care Act has had a significant effect on Louisiana’s health care landscape, mainly through the expansion of Medicaid as an option for states under the ACA that Gov. John Bel Edwards acted on.
Edwards said Tuesday eliminating the ACA "is not the answer." More than 500,000 people are enrolled in the Medicaid expansion, which is threatened by the move to toss the ACA, Edwards noted. Nearly 850,000 people with pre-existing conditions in Louisiana "face uncertainty" amid talk of ending ACA, the Louisiana Department of Health said.
The expansion of Medicaid, a health insurance program for the poor, in turn, has affected enrollment in the individual exchange, which has served as a safety net, providing federal subsidies to about 90 percent of those enrolled in Louisiana to help pay for their health coverage.
Enrollment in the individual exchange in the state fell by 15 percent for 2019 to 92,948. That was the lowest number enrolled in the state since the exchanges took effect in 2014, figures from the U.S. Centers for Medicare and Medicaid services show.
The numbers represent the third straight year enrollment in the Affordable Care Act exchange here has fallen since peaking in 2016 at 214,000. Nationally, enrollment fell slightly to 11.4 million for 2019 plans.
Frank Opelka, deputy commissioner for life, health and annuity, said Medicaid expansion is a “well-known core driver of population loss from the ACA individual market.” For instance, in states like Louisiana and Virginia that expanded Medicaid more recently, Opelka said the ACA individual market populations fell more quickly than states with more stable Medicaid populations.
A growing economy also appears to be having an effect on the individual exchange, which offers insurance to people who don’t receive it through work, Medicaid, Medicare or other means. As more people find work, they are usually eligible for employer-sponsored health insurance.
“We have also seen evidence some of this population is moving into the small group market as the state economy improves and employer-sponsored insurance becomes more available,” Opelka said in a statement.
While the department does not report coverage figures for alternative forms of insurance, like short-term, limited duration health plans, Opelka said there has been an uptick in the product filings for those policies. That has probably siphoned some patients from the individual market.
The Trump administration has loosened rules on short-term health plans, making it easier for people to find coverage outside the ACA market. The administration also temporarily froze some ACA risk adjustment payments, expanded access to association health plans and ended cost-sharing reduction payments to insurers — which cost Blue Cross and Blue Shield of Louisiana $10 million.
Brian Burton, director of the Southwest Louisiana Area Health Education Center, the only federally-contracted group that helps people navigate the exchange, also pointed to Medicaid expansion and a rising economy to explain the drop in individual exchange enrollment. Blue Cross and Blue of Louisiana cited those same contributing factors to the decline in exchange membership.
Also, talks of repealing and replacing the law in recent years, coupled with the actual repeal of a individual mandate that people must have health insurance, appeared to confuse many consumers as to whether the ACA was still in effect, Burton said.
Blue Cross also said it has seen growth in its small group segment, with much of the growth shifting from the individual market. In addition, approximately 90 percent of exchange membership in Louisiana receives subsidies, and as the economy improves and incomes grow, the number of Louisianians that are eligible for subsidies may be decreasing. However, many consumers who are not eligible for subsidies and do not receive benefits through their employers may now have the option to purchase short-term limited duration policies.
Burton said as a “safety net,” the individual exchange is still working as intended, even though enrollment is dropping.
The figures also show the drop in the average premium cost for 2019 did not have a sweeping effect on enrollment. After several years of double-digit rate hikes in the individual exchange, Louisiana’s remaining insurers — Blue Cross and Blue Shield of Louisiana and Vantage Health Plan — cut rates by about 6.4 percent on average. Blue Cross recently announced plans to acquire majority ownership in Vantage.
That rate cut was the first drop in premiums since the Affordable Care Act’s exchange went into effect. Nationally, rates fell by 1.5 percent in 2019 in the individual exchange, CMS reported.
Republicans in Congress and the Trump administration repealed the individual mandate part of the ACA, which issued a penalty to people who did not enroll in health coverage. That repeal went into effect this year, but Burton said navigators did not see a major change in patient behavior.
“We didn’t see this mass exodus of people leaving the market because they no longer had to have individual coverage,” he said.
The Louisiana Department of Health recently installed a new eligibility system for Medicaid in Louisiana after an audit said the agency may have allowed up to $85 million to be spent on ineligible people during a 20-month period. As a result of the new system, the department mailed out tens of thousands of letters to Medicaid recipients saying they may no longer qualify unless they provide evidence they meet the state’s eligibility requirements.
Burton said the navigators his organization employs are helping people wade through that process, and about half of the patients it helps are kicked off the Medicaid rolls and funneled to the individual exchange. That could bolster enrollment in the ACA exchange.
The Louisiana Department of Health is currently working with LSU to analyze how many people have shifted coverage from the federal marketplace to Medicaid, LDH spokesman Bob Johannessen said. Preliminary findings suggest that there was a "relatively small" change in the rate of private insurance coverage when comparing pre-expansion coverage rates from 2015 with data from 2017, after Medicaid expansion.
Johannessen also noted federal funding for navigators that help people enroll in the individual exchange has been cut in recent years.
A group of Republican attorneys general, including Louisiana Attorney General Jeff Landry, brought the lawsuit to repeal the health law, including the part of the law that protects people with pre-existing conditions.
The Trump administration in recent months had argued in that case that only parts of the ACA, like protections for people with pre-existing conditions and limits on premiums charged to older, sicker people, should be tossed, while the rest of the law should stand.
But in the filing in the 5th Circuit Court of Appeals, the administration said it wants the entire ACA struck down as unconstitutional. The Justice Department, which made the filing, did not elaborate Tuesday.
House Democrats also unveiled an effort Tuesday that would strengthen the Affordable Care Act. The bill would make more middle-class people eligible for subsidized health insurance through the ACA, according to House Speaker Nancy Pelosi’s office, among other changes. The bill is unlikely to pass the Republican-controlled Senate, but some parts could gain bipartisan support and pass.