Health coverage rates drop, including in Louisiana

Industry veterans fear the impact of the expiring individual mandate
Updated: Nov. 9, 2018 at 6:08 PM CST
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Health coverage rates drop, including in Louisiana

NEW ORLEANS (WVUE) - The health insurance landscape appears to be improving for 2019.

"We're seeing approximately about a five-percent rate decrease on the raw rates, now of course what someone pays can be affected by their income, family size and age,” said Wayne Schellhaas, owner of Wayne Schellhaas & Associates Insurance Agency.

Schellhaas who has been in the insurance business for decades said the lower rates are not just for consumers purchasing health coverage through the federal Affordable Care Act’s marketplace.

"The rates are consistent throughout. What matters is how you enroll is with, the only way you can receive an advanced tax credit is if you enroll through the federal marketplace,” Schellhaas stated.

The Trump administration agrees rates are now headed in the right direction.

"We don't expect enrollment drops, you know, the reality is the rates by and large across the nation have stablized, so for the very first time we're seeing more affordable increases and in some cases, across the board in the nation we've seen decreases of almost 2%, in some cases it's been 26%, or 14 and 15%,” said Seema Verma, Administrator for the Centers for Medicare and Medicaid Services.

Schellhaas said a number of factors are helping rates drop including limits on profits insurers can make related to the ACA.

"Basically, the MLR which is the minimum loss ratio, an insurance company cannot make excessive profits off of ACA applications because they're required to pay out X-amount of dollars, percentage-wise 85% of the money that comes in to them must be dispersed to pay for medical benefits. The other thing it's a maturing market. I think some of the largest claims that they had were incurred during the first two years, primarily the first and second year because people were unhealthy because they couldn't purchase insurance and now the fact that they have insurance their chronic diseases are better managed,” Schellhaas stated.

Louisiana U.S. Sen. John Kennedy said for many families the price of health coverage remains unaffordable.

"There are issues that we need to tackle that frankly would be better tackled on a bi-partisan basis, one of the cost of health insurance. Clearly, it remains an issue. We tried in the senate to develop a new health care delivery system, we failed in large part because we got no democratic support and then we fell one vote short on the republican side,” Kennedy stated.

Republicans repealed the ACA’s individual mandate provision which requires most Americans to have health coverage or face a federal fine. That change is to take effect in 2019.

"And that's the one thing that does scare me, I'm hoping that these rate decreases will continue,” said Schellhaas.

Industry experts say having more healthy people insured helps keep rates lower.

The ACA became law during President Barack Obama’s administration. And with some members of Congress hoping to tweak it even more, and consumers and their advocates have expressed concerns that protections for people with pre-existing conditions could go away.

"I'm not going to vote for a bill that doesn't cover pre-existing conditions,” said Kennedy when asked about those concerns.

"Once you give people something it's very hard to take it back,” said Schellhaas.

Information on the Louisiana Insurance Commissioner’s website says rate filing for plans on the Health Insurance Marketplace show an approximate average decrease statewide of 6.4 percent in the individual market and an increase of 0.1 percent in the small group market.

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