Donelon preparing for insurance reform as the state sues to stop it

Louisiana is one of the states suing to stop federal health insurance reform, arguing the mandate requiring almost everyone to buy insurance is unconstitutional. But Commissioner of Insurance Jim Donelon still has to prepare to implement the law’s requirements. Donelon says his department has been meeting with federal officials regularly. The state’s first major decision was to opt out of creating a federally funded, high-risk insurance pool, deferring to the federal government to create the pool for Louisiana. Donelon objected because the money provided was insufficient, and because participants in the existing Louisiana Health Plan for people who can’t find insurance in the private market would not be immediately eligible, he says. The state has applied for a $1 million grant to implement rate overview. Louisiana does not regulate health insurance rates as many states do. The federal law won’t require the state to pre-approve rate hikes, but it does require “oversight for excessiveness,” Donelon says. The Patient Protection and Affordable Care Act will essentially force insurers to accept all comers, regardless of pre-existing conditions, in exchange for the mandate. If the mandate is found unconstitutional, Donelon says that would destroy the system. “It can’t work with guaranteed issue without mandated coverage,” he says. “They would certainly have to start over.” —David Jacobs