Insurance Commissioner Jim Donelon submitted the report requested in Act 412 of the 2019 Regular Legislative Session which establishes the Louisiana Guaranteed Benefits Pool (LGBP) which only becomes active in the event of the Affordable Care Act being deemed unconstitutional. The LGBP is a risk-sharing program which is designed to reduce premiums for health insurance products offered in the individual market in our state by defraying the claims cost of high-risk insureds in that market. The LGBP will apply to lives covered by non-grandfathered health insurance products in the individual market. The Louisiana Department of Insurance (LDI) surveyed stakeholders and other states to determine best practices and engaged a leading actuarial firm (Lewis & Ellis, Inc.) to conduct an analysis of the cost of the program
“Based on the outside actuarial study, this program is slated to reduce individual market premium by 35-40%, or nearly $300 per month, and this level of savings represents an earth-shattering financial benefit to potential policyholders,” Commissioner Donelon noted. “This level of reduction is sure to create a significant return to the individual marketplace by moderate-income Louisianans, in particular those with preexisting condition who are currently priced out of the market.”
The report highlights the LGBP program’s target is to provide protection for individuals with preexisting conditions in the event of a loss of income-based subsidization and provides a critical first step to ensuring affordability. Additionally, the LDI has suggested a number of affordability-focused programs for evaluation based on Act 412. These complementary programs can enhance the effectiveness of the LGBP’s $230 million annual savings and provide stronger individual market protections than exist currently within the ACA.