There are universal problems with the Affordable Care Act and the state of healthcare in the U.S. that need to be addressed in upcoming health reform, Louisiana Insurance Commissioner Jim Donelon last week told advisers attending EBA’s Workplace Benefits Renaissance in New Orleans.

“I point out wherever I go that the system is broken and needs to be reformed,” Donelon said, calling the ACA “rushed out” and “half-baked.”

Louisiana Insurance Commissioner Jim Donelon speaks at EBA’s Workplace Benefits Renaissance in New Orleans.
Louisiana Insurance Commissioner Jim Donelon speaks at EBA’s Workplace Benefits Renaissance in New Orleans. Elizabeth Galentine/EBA

“Higher rates in 2017 is a trend being played out across the country,” Donelon said. Other problems include lack of choice on ACA exchanges and the nation’s growing opioid epidemic, he added.

One way President Donald Trump plans to stabilize the market is by requiring delinquent policy holders to pay overdue premiums before re-enrolling with the same carrier for health insurance coverage. This will work, Donelon said, because most Americans only have one choice of carrier where they live.

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Another area of instability, Donelon said, is the “excessive use” of the ACA’s special open enrollments and the length of the regular open enrollment period. Currently about three months long, Trump intends to shorten the main enrollment period to just six weeks, Donelon said.

Short-term expectations
Upcoming fixes to the ACA by the Trump administration are “only designed to get us through this year and give Congress time” to build a long-term solution, Donelon said. “It’s an offering to the industry to please stay on. Give us one more year.”

The real problem, however, is the cost of healthcare, particularly in the last six months of life, he said. The way to address it would be to make things more competitive by disconnecting health insurance from employment and putting it in the hands of the individual, so that they can control where their money goes at the end of their life, he said. “I think you would see a whole lot more competition … but it’s not going to happen,” Donelon added.

What is likely to happen, he said, is the removal of the ACA’s medical loss ratio provision. “It is why agents’ commissions were eliminated or almost eliminated by most carriers,” he said.

Donelon added that “the national [broker] groups haven’t said much” about the MLR and referenced the National Association of Insurance & Financial Advisors and the Independent Insurance Agents & Brokers of America as being “the most influential” on the subject. He urged those organizations as well as advisers in general to keep bringing it to the attention of Congress.

“Put that at the top of your radar,” Donelon told the audience.

“The left wants you out of the picture … They’re going to try to keep you and your commissions out of eligibility,” he added, saying liberals are more interested in a single-payer solution.

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