It’s that time of year — the open enrollment period for health plans.
In the second year of insurance exchanges established by the Affordable Care Act, premiums in Louisiana, as elsewhere, will be higher on average.
“And there are some understandable reasons for that," said Insurance Commissioner Jim Donelon. The No. 1 reason is that insurers can no longer turn away people with pre-existing conditions. "They have to take all comers."
In the past, those in the high-risk pool who couldn’t get insurance on the private market had to rely on the “Louisiana Health Plan”, priced at 120 percent of what an average healthy person of that age and sex paid.
Now that extra cost is spread throughout the market, contributing to the 12 to 15 percent uptick in premiums for next year.
Another driver — requirements for lower deductibles and copays, and the elimination of lifetime limits on coverage.
“With that comes higher premiums,” Donelon said.
For a 42-year-old non-smoker in Louisiana buying a basic bronze plan individually will cost $312 a month on average in 2015. The average platinum plan — with bells and whistles — is $516 a month, according to new analysis prepared for the state Department of Insurance.
“It is very expensive to buy, even though it is, absolutely essential. Uninsured health costs is the largest driver of bankruptcies in America.”
Commissioner Donelon says premium increases do tend to have a negative effect on enrollment. And penalties for not having insurance are only a fraction of premium costs: $95 or 1 percent of household income in 2014 — in 2015 that will go up to $325 or 2 percent.
Nonetheless, last year, 101,000 people signed up for health insurance through the federal exchange.
“We think 80 to 85 percent of those people did so because they qualified for a subsidy that the Affordable Care Act made available.”
Will those 101,000 people renew?
“Certainly. And I’m anticipating an increase in the number of folks signing up online,” Donelon said.