Starting in 2013, Louisiana individuals and families will be exempt from insurance co-payments and deductible for certain preventive health care services.
Insurers are banned from discriminating against individuals based on pre-existing conditions, gender, their job, employer size or industry.
But individuals and families could also see their insurance premiums go up as a health insurance premium tax that went into effect Jan. 1 gets passed along to consumers.
The changes occur as the federal health revamp known as the Affordable Care Act, or Obamacare, continues to be implemented in Louisiana and other states across the nation.
Starting in 2014, almost everyone will be required to be insured or pay a fine. There are subsidies to help people who can’t afford coverage. Most employers will face fines if they don’t offer coverage for their workers.
Newly-created insurance markets, called exchanges, are supposed to be in place by Oct. 1 to make it easier for individuals and small businesses to buy affordable coverage. Open enrollment for the health plans is supposed to begin then.
“What individuals and families will see first of all when it comes time for renewing in 2013 they will see a probable increase in their premium,” said Jeff Drozda, head of the Louisiana Association of Health Plans, a Baton Rouge-based trade association for the health insurance industry.
The premium tax and such things as the new limitation on co-pays are projected to drive up the cost of insurance, Drozda said.
Projections are that the increase over 10 years on an individual with an individual policies is an estimated $2,128 and an individual policy for a family is $4,512, he said. Small business policies would cost an individual $2,589 more over the next decade and for families, $6,391, Drozda said.
Drozda said Louisiana residents will also see “a lot more advertising in terms of educating the public on the (insurance) exchange and how it will work.”
Louisiana won’t operate its own exchange, opting instead for the federally-operated network through which qualified health plans will be offered.
“What I would anticipate here in Louisiana is the same carriers offering insurance products. You also may see some new carriers,” said Drozda.
State Department of Health and Hospitals Secretary Bruce Greenstein said the state is preparing for additional administrative responsibilities that will come because of the exchange.
“There’s going to be woodwork effect with people ... going into the exchange and turning out eligible for current Medicaid,” Greenstein said. He said the agency estimates there are 20,000 to 25,000 people who fall into that category.
Gov. Bobby Jindal has nixed state participation in a Medicaid expansion that would provide federally-funded health insurance to tens of thousands of Louisiana’s working poor. Louisiana’s uninsured under age 65 with incomes less than 133 percent of the federal poverty level will remain so.
The governor described the program as too expensive, citing estimates the Medicaid expansion would cost Louisiana $3.7 billion over 10 years. He also said he is philosophically opposed to the growth of the federal health care program.
The 133 percent threshold is $14,856 for an individual or $30,656 for a family of four.
Their care will continue to be provided with dollars for uninsured care which come from the state and federal government. Dollars for uninsured care are scheduled to be reduced substantially over time under the Affordable Care Act, as more people are covered with traditional insurance, Medicaid or Medicare.
According to the most recent Louisiana Health Insurance Survey, the uninsured rate is 22.7 percent for adults and 3.5 percent for children. Louisiana’s population is about 4.5 million.
Greenstein said there are no regulations and no guidance, as yet, on what the reduction in uninsured care dollars that begins in October will mean for Louisiana.
“It’s at the secretary’s discretion,” said Greenstein, referring to U.S. Health and Human Services Secretary Kathleen Sebelius. “It should be tied to the amount of uninsured in the state. We have a pretty high uninsured rate compared to other states.”
But Louisiana also opted not to expand Medicaid.
Greenstein said he anticipates “very little reduction” in the cap on uninsured care funding. And even if there is, Louisiana’s cap on funding — between $700 million and $800 million — is far in excess of what it uses, he said.
Louisiana Senate Health and Welfare Committee chairman David Heitmeier said the Medicaid expansion could lead to 500,000 more people having insurance coverage, with the federal government initially paying 100 percent of the cost.
Heitmeier, D-New Orleans, said the administration is looking to see if there is “any expansion flexibility.” He noted that states can opt in or opt out at any time.
“We really were expecting see more flexibility from HHS to engage states,” Greenstein said.
Greenstein recently published emergency rules implementing a new Affordable Care Act requirement, under which pediatricians, family practice and other physicians get the higher Medicare reimbursement rate for delivery of primary care services beginning Jan. 1. Medicare is the government health insurance program for seniors.
In the fiscal year that begins July 1, it will mean $82 million in extra payments to physicians of which $5.35 million will be state funds, Greenstein said. The federal government is paying full cost of the difference between Medicaid and Medicare as of the date the ACA was signed into law.
“We had made some rate cuts in physician services. Now, we have to pay the state general fund up to the maintenance of effort, then we get 100 percent on top of that. For fiscal year 2014, it’s $5.3 million in state general fund revenue,” he said.
For the remainder of this fiscal year, it’s about half that amount, Greenstein said.
“From a practical standpoint, we will be able to provide access to care and be adequately reimbursed,” said Dr. Horace Collinsworth, president of the American Academy of Pediatrics - Louisiana Chapter. “Hopefully it’s going to encourage more providers to practice in Medicaid.”
Collinsworth said rates for pediatricians had increased to 90 percent of the Medicare rate a couple of years ago, but budget cuts have hurt. “I think it’s going to help bridge some of the recent cuts we have had at the state level,” he said.
Collinsworth said the state should be expanding Medicaid as provided for in the ACA to get more regular access to health care for its residents, instead of expensive emergency room visits.
Having more people with health coverage would offset the “cost shifting” that currently goes on to cover cost of the uninsured that drives private insurance costs up, Collinsworth said.
Looming over ACA implementation in Louisiana is the question of whether the state is going to have sufficient primary care physicians, nurses, physician’s assistants and others needed with all the changes occurring in the LSU System, said Karen Zoeller, vice president of Louisiana Hospital Association, a trade association of representing hospitals and healthcare systems throughout the state
The Jindal administration is moving the traditional public hospital system toward private sector operations creating tumult at the facilities which are the training ground for the state’s future physicians, nurses and other health care professionals.
Zoeller said the Affordable Care Act is going to impact health care providers both from the standpoint of providing care and being employers.
And then there’s the sheer volume of regulations, paperwork and education that will be required, said Zoeller.
Employers must report the value of health coverage they provide employees on W-2s starting in 2013, she said. “They are not taxing you, but they still have to report it. I think the feeling is it might come to the point they might someday do that,” Zoeller said.