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Capitol Views: Education setback for Edwards; Donelon all in on reinsurance pool

April 11, 2018
By Jeremy Alford
Originally Posted on Greater Baton Rouge Business Report

As is usually the case during this time of year, statewide elected officials are being pulled into the orbit of the regular session and are being met with varying degrees of success.

Gov. John Bel Edwards, for instance, saw two of his centerpiece education priorities shunned by lawmakers today, while Insurance Commissioner Jim Donelon was marching his own department’s proposal for a reinsurance pool over to the Senate.

Today marked the third year in a row that Edwards sought to lessen the role student test scores play in teacher evaluations and to increase access to tenure. It also was the third year in a row that the governor’s package was turned back by the House Education Committee.

House Bill 651 by Rep. Frank Hoffmann, R-West Monroe, would have addressed the test scores question, but was permanently parked by committee members.

The bill was heavily criticized by the state Education Department, Council For A Better Louisiana and Louisiana Association of Business and Industry. Hoffman withdrew House Bill 587, which contained the tenure language, from consideration. “I’ll save you some time,” he told his colleagues.

From a policy perspective, today was likely sunnier for Donelon, who helped push legislation for a statewide reinsurance pool through the House last night. A 63-34 vote moved the bill out of the lower chamber, but it also signaled a noticeable divide over the concept. House Bill 472 by Rep. Major Thibaut, D-New Roads, is now pending introduction in the Senate, where Sen. John Smith, R-Leesville, is expected to handle the bill.

While many corners of the business lobby have concerns about the legislation, Donelon has been selling the proposed pool as a tool to “stabilize the state’s ailing individual market for health insurance.”

In the past five years, according to Donelon, insurance rates in the individual market have more than doubled as the number of health insurers doing business in the state has declined, from 16 to 2. “The individual market, where tens of thousands of self-employed Louisianans get their health care coverage, along with thousands of other Louisiana residents who do not have access to employer-sponsored insurance, is in serious jeopardy of entering a death spiral where rates continue to climb and many decide to go uninsured,” he said.

The reinsurance called for in the bill would be applied to high dollar claims, which mirrors a federal program that’s been on the books for three years.

The bill, likewise, allows Donelon’s department to impose a fee of “approximately $1.40 per month on all insured lives to fund the reinsurance program.” Donelon said the legislation could reduce rates by about 15% in the individual market and that the “small fee” on Louisiana policies would attract more than $100 million in matching federal funds.