Louisiana Insurance Commissioner James Donelon says he is supporting a bill that would create an insurance pool to help stabilize the state’s individual market for health insurance.
The Louisiana Department of Insurance announced that Donelon, along with state lawmakers Rep. Kirk Talbot, Rep. Major Thibaut and Sen. John Smith, is urging Senate passage of House Bill 472, which passed the Louisiana House of Representatives by a 63 – 34 vote. HB 472 would create a creating a state-wide reinsurance pool for health coverage.
“In the last five years, insurance rates in the individual market have more than doubled while the number of health insurers doing business in the state has declined from 16 to 2,” Donelon said in the LDI’s announcement. “The individual market where tens of thousands of self-employed Louisianans get their health care coverage, along with thousands of other Louisiana residents who do not have access to employer sponsored insurance, is in serious jeopardy of entering a death spiral where rates continue to climb and many decide to go uninsured.”
House Bill 472 proposes that Louisiana create a program to provide reinsurance for high dollar claims. The program would mirror a federal program that existed for three years after the creation of the healthcare marketplace through the Affordable Care Act.
Louisiana’s program would authorize Donelon to impose a fee of approximately $1.40 per month on all insured lives to fund the reinsurance program.
In addition, the state would be eligible for the use of federal matching dollars that will help Louisiana achieve a higher rate reduction in the individual health insurance market than was previously achieved through the federal program.
The reinsurance program could lead to rate reductions of about 15 percent in the individual market, the LDI said.
The small fee on Louisiana policies would attract more than $100 million in matching federal funds.
HB 472 has bipartisan and bicameral support including that of Talbot, chairman of the House Insurance Committee, and the committee’s vice chairman, Thibaut, and Smith, chairman of the Senate Insurance Committee.
Source: Louisiana Department of Insurance
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