While paying bills , something I’ve done consistently in our household for three decades , I was ruminating on how differently we spend our money today versus 30 years ago.
It’s just my wife and me living in our home now. My three kids are all on their own, married and doing great! But last time I looked at old household records, I noticed our grocery bill is still about the same even though we are now only feeding two, not five.
Cars cost roughly triple what they did in 1995 for similar-sized models. The standard four-door sedan I bought for $15,000 in 1995 is $40,000+ in 2025. Sales taxes are higher, property taxes are a bit higher, electric bills are roughly 25% more (per kilowatt/hour) than back then. And while many things are much more expensive than 30 years ago, some things have stayed about the same. I couldn’t find anything that was cheaper, even after inflation adjustments.
It’s just the nature of things, I guess.
More important than comparing costs is making sure that I’m 100% transparent with my wife on our financial dealings. In my nearly 40 years of marriage, I’ve learned (sometimes the hard way😊), that transparency is critical to trust and maintaining a healthy relationship. I can say with confidence today that she knows as much as she wants to know (and a little bit more) about our finances.
Transparency Builds Healthy Trust in Your Health Plan, Too
I want us here at Louisiana Blue to enjoy a similar level of trust with you. Year after year, the good people of Louisiana trust us with billions of their hard-earned money to ensure they have access to healthcare when they need it. This is typically healthcare they could never afford to pay for out of their own pockets.
In this spirit of transparency, I’d like to present to you our 2024 edition of the dollar bill. We’ve used this illustration for years to communicate to our members how we spent their money, breaking it down with a $1 visual.
Here’s the latest edition:
You can see that last year, for every premium dollar we took in:
- 34% went right back out the door to pay for inpatient hospital care for our members
- 20% paid for doctor’s fees and outpatient services
- 32% bought prescription drugs ONLY – from the hospital, doctor’s office and pharmacy
Altogether, that’s 86% of the money you trusted us with (86 cents of every premium dollar) that bought nothing but healthcare services for our members.
But Mike, what About the Other 14%?
Great question! In the 14% remaining, Louisiana Blue paid 1.7% in taxes and fees to government entities. That money often goes into programs like Medicaid and Medicare that provide healthcare and health insurance for other Americans.
It took another 6.3% of the money you sent us to operate our business. That includes keeping eight regional offices open around the state, paying our almost 3,000 employees and covering all the expenses required to run a business, like their benefits, facilities maintenance, compliance costs, developing new products, equipment upgrades, legal costs, advertising so people know how to sign up for coverage and the like. We paid 3.3% in service fees for the brokers, agents and consultants who help our employer groups, their members and their dependents get and stay covered (these folks represent about 85% of our total membership).
After all that work, we had about 3% of revenue left over. We put it in our rainy day fund. Notice we did NOT distribute that money to anonymous shareholders or bondholders all over the planet. As a taxpaying, not-for-profit insurance company, we simply don’t have any share or bondholders. Nobody else gets control of our rainy day fund, which lets us invest it prudently. And the return it generates is put right back into Louisiana Blue, to help cover our costs.
As you can see, we run a very tight ship here at Louisiana Blue. We make sure that the bulk of the money you entrust to us goes right back out to pay for your healthcare. And we use any additional revenue as savings so in the event of hurricanes, floods, health emergencies or other disasters, we can make sure we’re able to keep our lights on, keep paying our network providers and keep access to care in place for our members.
And that’s our 2024 results in a nutshell.
What’s Next?
Unfortunately, 2025 has been tougher. Our industry is facing challenges driven by rising medical and pharmacy costs. And like other health insurers, we’re having difficulties in our individual lines of business, largely from the looming expiration of enhanced premium tax credits passed in 2021. These subsidies help people buying HealthCare.gov plans pay for them. With the loss of that financial assistance, it will be harder for people to find affordable coverage. Given all these factors, 2025 and 2026 won’t look as good as 2024. And because of that, we’re having to make tough decisions.
What stays the same year to year is that Louisiana Blue makes every effort to ensure we are very good stewards of your money. The Straight Talk is, we are very good stewards of your money. We work hard to protect and invest our income (your dollars!) in the most responsible way possible, to make sure it’s there for you when that expensive healthcare condition strikes. When you can’t pay for a big-dollar covered service, you can rest assured that your Louisiana Blue membership will mean financial security to cover the healthcare you could never afford to pay for on your own.
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