Louisiana: Preliminary 2019 #ACA rates: 6.4% drop, but would have dropped up to ~15.7% w/out #ACASabotage

2018 MIDTERM ELECTION

Time: D H M S

Only limited portions of Louisiana's actual rate filings are actually publicly available at either the SERFF database or the HC.gov Rate Review site, making it difficult to get a bead on the weighted averages. Fortunately, this article in The Advocate does the work for me:

Obamacare premiums to drop in Louisiana in 2019 after years of rate hikes

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."

...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.

Note: Those "federal rules" are otherwise known as "the Affordable Care Act's 80/20 MLR provision". Thanks, Obama!

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.

That's the good news. However, as with every other state except Massachustts and New Jersey, rates would be even lower without the mandate being repealed by Congressional Republicans and the floodgates being opened for #ShortAssPlans by the Trump Administration:

...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.

Now that's interesting--this is the first time I've heard a state insurance commissioner come right out and state that they already added #MandateRepeal to 2018 premiums. A few individual carriers mentioned it last fall, but it was always a bit amorphous; most didn't mention it explicitly until this year, since the mandate wasn't actually repealed until last December.

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.

...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.

As for how much of the #MandateRepeal & #ShortAssPlans factor has "already been priced in", the Urban Institute projected that to be roughly 14% overall. As usual, I'm knocking 1/3 off that and assuming rates would drop an additional 9.3% if not for those factors.

In dollar terms, unsubsidized Louisiana enrollees are paying an average of $649/month this year. If rates dropped 15.7%, they'd pay around $547/mo; at a 6.4% drop, it should end up around $607/mo on average. That's a $60/month difference, or $720 for the year.