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Healthcare Laws Impact on Premiums

July 11, 2013

insuranceLouisiana’s largest health insurer, Blue Cross and Blue Shield of Louisiana, estimates that two-thirds of its customers who buy their own policies will pay the same premiums or less under federal healthcare reform, the Associated Press reported Wednesday.

But that’s only if people take advantage of federal subsidies being offered under the law, Blue Cross officials said, referring to the impacts of the Affordable Care Act.

About 76,000 households covered by Blue Cross in Louisiana pay for their own insurance, rather than getting it through their workplace or another group. Those “individual market” customers could see substantial changes in 2014 when many of the federal insurance changes take effect.

Brian Small, senior vice president and chief actuary for Blue Cross and Blue Shield of Louisiana, said because insurers won’t be able to decide rates based on pre-existing health conditions and gender, there will be a reshuffling of how premiums are charged.

“The rates for the oldest will decrease at the expense of the youngest, who will see an increase,” Small said.

In addition, new fees will hit insurers and new benefits will be mandated for inclusion in health care policies.

Blue Cross officials said both will drive up costs, as insurance companies pass along the new fees to customers and the wider array of coverage benefits carry a higher price tag.

The federal health care law provides federal subsidies to help offset some of those costs, meaning that for many existing Blue Cross customers who pay for their own individual policies, prices won’t rise.

Among those households that buy their own insurance, Blue Cross estimates 31 percent will be grandfathered in under their current policies without changes and another 37 percent will be eligible for large subsidies for low-income buyers and could pay less for their coverage.

Subsidies are available on a sliding scale for people with incomes between 100 percent and 400 percent of the federal poverty level — about $23,000 to $92,000 for a family of four.

In general, the largest cost hikes will fall on young, healthy, middle class customers who earn too much to qualify for federal subsidies, along with people who currently pay for policies that are low-cost, hospital-only plans and will be required to get policies with increased benefits, Small said.

Customers receive their new bills on the anniversary date of when they first paid for coverage, so the price changes for Blue Cross customers will be phased in from January to December of 2014.

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