La. insurers ponder possible consequences of president's move - FOX 8 WVUE New Orleans News, Weather, Sports

La. insurers ponder possible consequences of president's move

Updated:

NEW ORLEANS - A day after President Obama announced administrative action to allow millions of Americans who recently had their insurance policies canceled because of benefits requirements in the health reform law to keep their current coverage for another year, the Louisiana health insurance industry is trying to determine what it means for it.  And there are fears that profits could take a big hit especially for insurers offering coverage through the Affordable Care Act marketplace.

"The insurance companies are in a mess because when they priced out their marketplace plans, you know, the one on the website they did it under the assumptions that so many people would be coming in," said Walter Lane, Ph.D., a UNO economist who is considered an expert on healthcare economics.

Dr. Lane said the president's decision changes the profitability for insurers in the marketplace. Experts said the marketplace requires a healthy dose of young and healthy individuals to keep rates affordable for everyone.

Still, some believe the president's move will benefit many with individual insurance plans who have been unsettled for weeks.

"I think for the purposes of trying to mitigate the frustration of the public, I think that if he's able to do what he is trying to do I think it would actually help a lot of people not to have the angst of having their policy canceled if they really are happy with it," said Anthony Cimino, an executive with the Louisiana Health Cooperative which is one of a handful of insurers in the state selling coverage through the government's marketplace. LAHC targets uninsured individuals and not people who already have some type of coverage.

Cimino said the president's action could actually drive many people who have insurance to the marketplace.

"If these insurance companies have to disclose the fact that, yes, you can keep your current plan, but you may be better off and should investigate what is available for you in the marketplace, it may actually help bring more attention to the marketplace," he stated.

Blue Cross and Blue Shield of Louisiana, another company offering plans through the marketplace issued a statement. John Maginnis, Vice President of Corporate Communications for BCBS of Louisiana said the following:

"First and foremost, Blue Cross and Blue Shield of Louisiana is a Louisiana company. We care about our customers and all Louisianans. Since the Affordable Care Act was passed in March 2010, we have worked to balance the law of the land with our mission to keep Louisiana healthcare affordable. We are a mutual, not-for-profit company – owned by our policyholders – and we owe them our very best efforts.

We believe it is far too soon to know what's going to happen after President Obama's statements in Thursday's press conference. This is a rapidly changing situation that requires intense analysis. There are too many unknowns, and it will take time to sort things out.

We have a dedicated internal team attempting to address these many questions, and we will be reaching out to the Louisiana Department of insurance to talk about next steps. President Obama is allowing state insurance commissioners the final say on whether or not to implement his "fix" in their states.

Louisiana Insurance Commissioner Jim Donelon has said he does not yet know if Louisiana will embrace the president's changes. He expressed concern that this could create a "big solvency issue for insurers." He further stated that it must be determined what changes are allowable under the law. He said a decision on that could come as soon as next week.

But he also said, "There's also the possibility we go to court to get a decision, adding that doing so would seek a "declaratory judgment action."

In addition to this, bills dealing with this issue have been introduced in the U.S House of Representatives and the United States Senate. Either or both of these bills, if voted into law, could alter the "fix" President Obama announced Thursday.

Given the shifting circumstances and the uncertainty surrounding this issue, we are unable to make a more detailed statement at this time. We will continue our internal analysis, seek counsel from the Louisiana Department of Insurance and keep an eye on further developments in Washington. As this situation comes into focus, we will issue more detailed statements. A lot is at stake for our customers and we want to make sure we get this right," the statement reads.

Many people shopping for insurance through the marketplace will qualify for federal subsidies to offset some of the costs of purchasing insurance and Dr. Lane said if insurers end up raising their rates in response to what the president implemented this week the federal government could end up pay more for those subsidies.

"The government's going to have to pay those rates for everybody that gets a subsidy because the subsidy set is based on your income, not on the cost of the plan," stated Lane.

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