Blue Cross describes health law impact on premiums

BATON ROUGE, La. (AP) -- Louisiana's largest private health insurer, Blue Cross and Blue Shield of Louisiana, estimated Wednesday that two-thirds of its customers who buy their own policies will pay the same premiums or less under the federal health care overhaul.

But that's only if people take advantage of federal subsidies being offered under the law, Blue Cross officials said, outlining the anticipated effects 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 some other 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.

Under the federal law, most people will be required to have health insurance starting on Jan. 1 or face penalties — $95 for each adult in the household or 1 percent of the household's taxable income, whichever is greater. The tax penalty grows higher two years later.

To avoid the penalty, individuals can buy their own insurance through health care marketplaces, called exchanges, which will offer the ability to shop for coverage.

Mike Bertaut, senior health care economist for Blue Cross and Blue Shield of Louisiana, said the company that already covers about 991,000 people — or 21 percent of the state's population — plans to offer health insurance coverage in all of Louisiana's 64 parishes through the exchange, which will be operated by the federal government.