Individual insurance mandate kicks in, but La. residents slow to - FOX 8 WVUE New Orleans News, Weather, Sports

Individual insurance mandate kicks in, but La. residents slow to sign up


NEW ORLEANS - New Year's Day 2014 will be more than a flip of the calendar because of health care reform.

On Jan. 1, the federal government's individual mandate takes effect. It requires most Americans to have medical coverage or face an IRS penalty, but in Louisiana, residents are slow to embrace the federal health insurance marketplace.

"Through Nov. 30, CMS, the federal government tells us it's 2,200 have signed up," said Louisiana Insurance Commissioner Jim Donelon. "We don't have the numbers since then. For the month of December, it's not much higher than that I do not believe, and lots of reasons for that, beginning with the problems with the website,"

The federal government's website,, has been plagued with technical problems.

While the law mandating that most people have coverage takes effect on New Year's Day, it also has a grace period built in to it. You have until March 31 to secure coverage or face a penalty, unless you are covered by one of the exemptions.

Ray Hebert Jr., is an insurance broker with Hebert & Hitzman in Mandeville. He said in recent weeks he has helped several local people buy insurance in anticipation of the mandate.

"Maybe 10 to 15 percent of them did not have it because they couldn't afford it, and because of their health history," he said.

The individual mandate aside, several other major changes take effect Jan. 1.

Adults with pre-existing conditions can no longer be disqualified for health coverage, and women will not be charged higher rates than men. Also lifetime maximums will become a thing of the past.

Donelon said the mandated upgrades in benefits come with a price tag.

"That is a very expensive benefit along with unlimited lifetime coverage," he said.

Also, coverage begins New Year's Day for people who signed up for insurance by Dec. 24 and paid their first premium. Plans kick in for workers at small companies providing insurance through the government marketplace, as well.

But overshadowing the future of health care reform is the nagging question of whether young adults will buy into the system and actually purchase insurance - something that is critical to keeping rates affordable across the marketplace.

"You have to get those premiums in to help compensate for those who are going to use their insurance a lot more," said Hebert.

And Donelon said the president's decision to allow millions of Americans who have inferior individual plans to keep them for another year is not helping the situation. Ninety-three thousand Louisiana residents fall in that category.

"That encouraged them out of the bucket of folks who were accessing the new, greater coverage federal plan, and without those young healthy [individuals], without those young strong, less expensive to the system policy-holders, the more expensive, older, sicker population drags the system down," Donelon said.

Donelon said confusion over what the law requires continues and may be worse now than before.

The IRS penalty for not having insurance in 2014 is $95 or 1 percent of your income, whichever is greater. In 2016, the fee rises to $695.

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