Private insurance option is a win for patients and providers

Private insurance option is a win for patients and providers

A bipartisan plan is coming together in the Louisiana Legislature that urges the Jindal administration to extend health coverage to low-income adults in an innovative way by creating the Louisiana Health Care Independence Program. This new private insurance option — the “Louisiana plan” — would be a major step toward improving and strengthening health care in Louisiana, for several reasons:

  • The new option is a “Louisiana Plan” that encourages innovation, not a “one-size-fits-all” solution. Billions in federal funding is available to states to improve access to health care, with ample flexibility for states to craft models that fit their individual circumstances. The private insurance option is a Louisiana-focused plan that will help the uninsured gain coverage, strengthen the state’s private insurance market and help support Louisiana’s health care providers by ensuring that doctors, hospitals and clinics are paid for their important services. Passing the Louisiana plan is only the start of the process. It directs the state health department to apply for a federal waiver from the Affordable Care Act.
  • The Louisiana Plan takes advantage of flexibility to create a private-sector model. Instead of simply expanding the current Bayou Health Medicaid program, the state would help low-income adults buy private coverage using billions in available federal revenue, with cost-sharing for new enrollees based on income. Expanding coverage will give Louisianans a bigger stake in their health, improve access to care and support our state’s doctors and hospitals.
  • The Louisiana Plan will improve the quality of care. Low-income adults would have a choice of insurance plans with more robust provider networks than those offered by Bayou Health. Enrollees would also have continuity of coverage, as they could keep their same insurance plan even if their income fluctuates instead of switching between Bayou Health plans and separate private coverage. This continuity will improve health outcomes and support consumer choice.
  • The Louisiana Plan will strengthen the private insurance market. Helping hundreds of thousands of uninsured Louisianans gain private coverage will strengthen the entire insurance market by reducing market uncertainty and cutting down on “cost shifting,” where people with private coverage pay higher premiums to compensate for free care given to the uninsured. Expanding private insurance to add more healthy adults to the risk pool will encourage competition, which means better prices for all consumers and less upward pressure on premiums. That translates into real savings for families and businesses that already buy insurance.
  • State taxpayers are protected. Expanding coverage will produce significant savings for taxpayers ($105 million in FY 2014 alone), as the state dollars that currently pay for uninsured care will be replaced with federal dollars to help the uninsured buy private coverage. To further ensure that taxpayers will be protected, the Louisiana Plan includes a stipulation that the program will be canceled if the federal government ever cuts its funding rate. It also has a July 2017 sunset date, when the plan will need to be renewed by the Legislature or else be allowed to lapse.
  • The cost of doing nothing is too high. Without the private insurance option, Louisiana’s public and private hospitals will face increased financial pressure as federal support for uninsured care is reduced. Businesses would face unintended, unnecessary penalties if Louisiana does nothing, when instead they should be benefiting from a healthier, more productive workforce.

The Louisiana Plan is the right choice for Louisiana’s families and health-care providers. The plan is not an end point, but a launch pad for further reforms. Policymakers should continue to work to improve the quality of health care in Louisiana, while also trying to control costs in a responsible way that protects patients. If the state rejects this opportunity, our federal tax dollars will be sent to other states, putting Louisiana at a competitive disadvantage. Expanding private health insurance means better access to primary care and a healthier people, as well as support for doctors and hospitals. Rejecting this plan means more financial stress on health care providers, poorer health care and increased mortality. Louisiana needs to move forward with this new, innovative care model. For a parish-by-parish breakdown of the benefits of Medicaid expansion, click here.

Traditional Medicaid Expansion

La. Health Care Independence Program

Minimal cost sharing (co-pays, etc.)

More cost sharing, based on income

More limited provider networks

More robust provider networks

Choice of 5 Bayou Health Medicaid plans

Greater choice of commercial insurance plans

Separate from private insurance market

Integrated into private insurance market

Both plans are better than the status quo and allow Louisiana to use available federal funding to improve access to care and support doctors and hospitals