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Healthcare Guaranteed Benefits Pool Would See Dramatic Premium Reductions and Encourage More Louisianans Get Insured

Healthcare Guaranteed Benefits Pool Would See Dramatic Premium Reductions and Encourage More Louisianans Get Insured
Insurance Commissioner’s Report Shows Lower Plan Premiums, Guaranteed Coverage for Pre-Existing Healthcare Conditions as a Result of Act 412

BATON ROUGE, LA – Today, Louisiana Commissioner of Insurance Jim Donelon delivered to the Legislature his initial report on beginning the implementation of Act 412 - the Health Care Coverage for Louisiana Families Protection Act, bipartisan legislation pushed by Attorney General Jeff Landry to protect patients with pre-existing conditions should federal courts continue to rule the Affordable Care Act (ACA) unconstitutional.

Among the key findings in the Insurance Commissioner’s Report:
*   The Guaranteed Benefits Pool will reduce individual market healthcare premiums by a dramatic 35%-45%. This is a massive savings especially in light of the fact that ACA plans in Louisiana have had an overall price increase trajectory equaling 14.6% per year - on average - from 2015-2019, including nearly 33% in 2017 alone.
*   The average health insurance premium reduction will be $300 per month less than current ACA rates. This is a savings of $3,600 per year - on average - for those with current individual ACA plans.
*   The premium reductions will result in encouraging a portion of Louisianans, specifically those currently unsubsidized, to return to the individual market and become insured. This will increase the rate of insured in Louisiana.
*   Access to coverage for Louisiana patients with pre-existing conditions is guaranteed along with other essential health benefits.
*   More young people will enroll in coverage with the change in age rating, again increasing the number of insured.
*   With a likely flattening of the age curve with full implementation and the dramatic savings resulting from the pool, older citizens could - and should - see savings.
*   The cost to implement the Guaranteed Benefits Pool is less than half of current federal taxpayer-funded ACA subsidies being sent into Louisiana.
*   Utilizing the ACA-budgeted subsidy money currently sent to Louisiana as a federal block grant would cover not only the cost of the Guaranteed Benefits Pool but also likely provide enough funding to subsidize or provide healthcare benefits for current low-income ACA enrollees.

“This report confirms what we believed when the Legislature, almost unanimously, passed Act 412: this bi-partisan law will protect individuals with pre-existing conditions while lowering health insurance premiums,” said General Landry.

“Louisianans currently in ACA plans will save thousands each year in their healthcare premiums,” continued General Landry. “This report details savings are possible not only in premiums but also in federal taxpayer overhead needed to administer the ACA from Washington. We can accomplish this without a so-called 'age tax' or a 'giveaway to the rich' as critics would falsely claim.”

“The Maine model, on which Act 412’s foundation was based, saw premium savings for older citizens; we expect the same in Louisiana due to the dramatic overall average monthly premium savings,” added General Landry.

It is important to note that Act 412 was designed as a state-based solution for those enrolled in current ACA plans. “Like the ACA, our Act 412 does not at all impact senior citizens who rely upon Medicare. It is critical for senior citizens to know their Medicare benefits are not impacted at all by the ACA or Act 412; they remain protected and untouched,” concluded General Landry. “Also, those who receive insurance from their workplaces are also not impacted.”

Act 412 prohibits the denial of healthcare insurance for pre-existing conditions; eliminates lifetime limits on the dollar value of benefits and prohibits annual limits on the dollar value of essential benefits; allows for healthcare coverage on parent policies for any child until the age of 26; and ensures that any healthcare plan provide for essential health benefits including ambulance care, emergency services, maternity and newborn care, hospitalizations, pediatric care, and prescription drugs among others.

To address the needs of those who are low or moderate income and receive coverage subsidies under the current ACA, Commissioner Donelon and General Landry both support a variety of possible solutions. These are outlined in the Department of Insurance’s report. General Landry has suggested that one solution would be to use a portion of the cost savings of higher income individuals for those at lower incomes - in addition to the remaining federal dollars through a block grant of current ACA subsidy funds. If this limited recapture of savings occurred, those at low and moderate income would stay insured while those who are unsubsidized would still experience a significant price savings each month. The Department of Insurance summary report includes this option. Act 412 is designed to benefit all Louisianans, not just those who are unsubsidized.

Act 412 passed the Louisiana Senate 38-0 and the Louisiana House 90-9, and it cleared the House Insurance Committee and the Senate Health and Welfare Committee without opposition.

Act 412 does not address Medicaid Welfare as the welfare program has been in existence since 1965 as a federal program, only administered partly by the State. The Attorney General expects that Congress and the President will continue to support this program, post ACA. Following the ACA, it is the Attorney General’s hope this can be done with more flexibility to the states to create innovation and reduce costs. President Trump has already introduced programs that signal his desire to give states greater flexibility over providing health care to their low-income populations in a more efficient and effective way. A continued push to stop welfare fraud, part of General Landry’s responsibility in Louisiana, is also important when looking at any changes to this federal program.