A recent Commonwealth Fund analysis is attracting a lot of attention, much of it negative, surrounding health insurance and healthcare affordability nationwide. That study compared Louisiana with other states and the national average. Let’s have a Straight Talk chat about the findings.
What the study says
The analysis scored every state based on what percentage of household income the average family spends on their health insurance premiums and deductibles. The overall ranking says that in Louisiana, the average family pays over 15% of their household income to cover their premiums and deductibles for the family’s health insurance. This was the worst outcome in terms of income hit of any state, ranking Louisiana 50th.
As a ninth-generation Louisianian who is a lifelong resident, I certainly cannot be satisfied with this result. You shouldn’t be, either.
Sadly, many of the comments and articles I’m reading about this recently published analysis are blaming the price of health insurance for this poor scoring. But by now, you all know me, and you know I can’t help but drill down to the real drivers of healthcare costs and the ways Louisiana Blue fights to keep costs down. And as I’m sure you’ve seen in my posts over the years, there is rarely one cause for every effect we see in these types of surveys. As my faithful readers for over a decade now, you deserve nothing less than the Straight Talk treatment on this. So, let’s talk about the different factors that make healthcare more expensive for Louisiana families.
So, Mike, why did Louisiana score so poorly in this study?
Spoiler ALERT! Our state’s poor score was NOT BECAUSE OF HEALTH INSURANCE PRICING! Hard data and sources coming right up. Let’s see what goes into this poor ranking and why this analysis showed families in our state spend a higher percentage of their incomes on healthcare compared to families in other states.
First, sadly, the average household income in Louisiana is almost the lowest in the nation. In the 2024 American Community Survey Briefs, U.S. Census Bureau analysis showed our average income 48th out of 50 states. The average Louisiana household is trying to get by on 25% LESS than the average American household. That works out to about $20,000 LESS for families to spend every year compared with families in other states. That’s huge. Of course, if your inbound money is less, buying anything as a Louisiana household means it will cost a bigger percentage of your income. It’s about how much money is coming in versus going out to pay for things your family needs.
Second, almost 85% of people covered on commercial health insurance plans (not Medicaid/Medicare) nationwide get it through an employer’s health plan. They are either covered through their job or the job of another household member.
Here, Louisiana is also way behind other states, especially when we look at what Louisiana employers are able to commit to covering their employees’ families. Kaiser Family Foundation data from 2024 shows that Louisiana employers rank LAST in how much they contribute to fund family coverage for their employees’ spouses and dependents. If the employer contributes less to cover health insurance costs for family members other than the employee, it pushes MUCH greater expenses into households who are covering the whole family via the normal employer route. And that shows in the data too; Louisianians contribute more to employer-provided health coverage than residents of 48 other states. Only California and Florida families pay more.
Finally, in terms of health status, Louisiana typically ranks at or near the bottom in most studies. Our state has above-average rates of people living with long-term health conditions like heart disease, high blood pressure, diabetes and obesity. We have high rates of diagnoses for many types of cancer. Our state also tends to score lower in terms of the numbers of eligible people having preventive screenings like colonoscopies, mammograms or regular checkups. Because the average health of our residents is worse and they have more health needs, our state’s average healthcare COSTS — which are 80-85% of the price of health insurance premiums — will be much higher than the national average.
When you combine all these things, it is hardly a surprise that the burden of buying and keeping health insurance for families in Louisiana is the highest in the nation, at over 15% of average household income just to cover premiums and deductibles.
But Mike, what about the actual COST of health insurance?! Surely Louisiana scores poorly there, too, and it’s too high, right?
According to the gold-standard Kaiser Family Foundation, no.
Louisiana’s health insurance premium costs for families are BELOW the national average. There are 38 states where households pay more for their health insurance premiums than the average here. If Louisiana families contribute the highest percentage of their household income, it’s not because health insurance costs more than average. In fact, Louisiana’s average family premiums fit into the “modest-low” category nationally in 2024.
OK, then it must be the deductibles that are making us look so bad! They are the highest I’ve ever seen!
I’m in total agreement that deductibles are high and increasing. I feel them in my health plan as well. But is Louisiana an outlier here?
Nope. Deductible costs are going up nationwide, and families from coast to coast are being asked to pay more out of pocket when they get healthcare services than they did in previous years. That means the baseline for every state is higher deductibles, unfortunately. But while deductibles are increasing everywhere, our state isn’t the highest in the country.
That same gold-standard data set also shows the average family household deductible in Louisiana is $300 per year LOWER than the national average. That’s about 10% less than deductibles families pay in other states. There are 35 states with higher average deductibles than Louisiana.
The Straight Talk is, current research shows Louisiana families are being asked to contribute a higher percentage of their household incomes to health insurance premiums and deductibles than families in any other state. What’s even Straighter is that we pay more because of the combination of very low average household incomes, lower employer contributions to health insurance for families, and a population that requires much more care than the average state. What is NOT driving that poor result is the cost of family health insurance premiums OR deductibles above the national average.
Straight as I can make it! And now that we’ve identified these actual causes of our poor showing in the Commonwealth data (low household income, lower contributions by employers to family coverage, a less healthy population overall), we need to look at the root causes of those problems and find some answers. I’ll cover that in some detail in Part 2 coming up soon!
Why do I have to pay the higher cost for other people that do not have the preventative screenings and yearly checkups?
Why do I have to pay for pregnancy coverage when no one on the policy is able to get pregnant?
Celeste! Thanks so much for reaching out to us today and reading Straight Talk!
These are excellent questions, and I’m glad you brought them up! It seems like common sense, right? After all, if I have fewer wrecks I get cheaper car insurance, so why not the same thing for health?
Today, there are two unavoidable legal requirements that Louisiana Blue must meet for health insurance coverage in the United States, and even more in Louisiana:
1. The federal standard of the Qualified Health Plan (QHP), which dictates health insurance coverage for all Employer groups and Individuals offered coverage (since 2010); and
2. The state of Louisiana coverage mandates (there are plenty!) which must be added to each employer group and individual plan when a health insurance company is at risk for medical costs. That’s a fancy way of saying that employers who take on their own risk (self-funded plans) may not be required to cover everything listed in state mandates, but #1 above still applies.
Every single health insurance plan we sell is required under federal law to cover the 10 essential health benefit categories and it’s been that way since 2010. State law can add even MORE requirements onto that coverage, and it does.
Also we are not allowed to charge people even $1 more or less because of their behavior, health conditions, living conditions, gender, or any other risk factors other than age and tobacco use.
This has been the law of the land since 2010. It was passed to every American via the Affordable Care Act that Congress passed and the President signed on 3/23/2010.
Under the law, every single policy we sell HAS to include at a minimum these 10 categories of coverage. And then state mandates can get piled on top of this:
The 10 ACA Essential Health Benefit Categories
1. Ambulatory patient services
Outpatient care you receive without being admitted to a hospital (e.g., doctor visits, outpatient surgery). [cms.gov]
2. Emergency services
Emergency room care without prior authorization and without higher cost sharing for out of network ERs. [cms.gov]
3. Hospitalization
Inpatient care such as overnight hospital stays, surgeries, and related services. [cms.gov]
4. Maternity and newborn care
Care before, during, and after childbirth for both mother and newborn. [cms.gov]
5. Mental health and substance use disorder services, including behavioral health treatment
Includes counseling, psychotherapy, and substance use disorder treatment, subject to mental health parity rules. [cms.gov]
6. Prescription drugs
Coverage for medications, based on state specific benchmark formularies. [cms.gov]
7. Rehabilitative and habilitative services and devices
Services and devices to help people recover skills lost due to injury or illness (rehabilitative) or gain skills not previously acquired (habilitative). [cms.gov]
8. Laboratory services
Diagnostic tests such as blood work and pathology services. [cms.gov]
9. Preventive and wellness services and chronic disease management
Preventive care (often with no cost sharing) and services to manage chronic conditions. [cms.gov]
10. Pediatric services, including oral and vision care
Pediatric dental and vision benefits are mandatory; adult dental and vision are not. [cms.gov]
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ALL of this stuff was encoded and passed in the Affordable Care Act (some people call it “Obamacare”) back in 2010, and we’ve all been living with it ever since.
That is the reason why you can’t pick and choose to not pay for things you can never use, or have to pick up the tab for people who don’t take good care of themselves.
Congress decided long ago not to give consumers that choice.
I hope that helps!…Please let me know if you need more information.
Thanks!…mrb
The CEO of Blue Cross of Louisiana makes over 1 million a year
Paul! Thanks so much for your comments about CEO salaries.
I thought you might appreciate my perspectives on that, since I’ve been monitoring cashflows and working in this business for over 20 years now.
First of all, let me say up front that I have no idea how much money our CEO makes. But what I DO know might prove helpful to put some context around that for you. First of all, anyone who is Chief Executive Officer of Louisiana Blue is essentially the ultimate responsible party for a portfolio of healthcare purchasing that exceeds $8 BILLION a year! That is a huge responsibility, and the job is not given out lightly. Since I’ve been here every single CEO we’ve had has been someone who has demonstrated decades of responsible leadership in protecting the assets of millions of hard-working people when they invest in health insurance.
It is even a heavier weight on that person in a not-for-profit single-state Blue plan like ours, since there is no way to raise money when times get hard by borrowing or issuing stock or bonds. You MUST plan for the future and have the discipline to create and maintain a rainy day fund or very bad things will happen. That’s the price of being a not-for-profit single-state Blue Plan like us. Discipline and forethought are a must. Not everyone I’ve met in management has the right mindset to do that well. But every person our Board has chosen to be our CEO in the last 20 years really has had that skill set, especially our Current CEO Brian Camerlinck.
Second of all, even if we could find someone who would accept all that responsibility and had the right gifts to do this job for a LOT less salary, our rank and file membership would not know it, because even your salary projection is not enough money to affect rates at all. We also have to assume that if we did someone a lot less, many talented people would pass on this job and accept that much responsibility in the world of investment, or finance, where they could make many $millions more instead. Honestly, should we trust $8 Billion a year of Louisianan’s hard-earned money to someone with LESS talent or value? That feels mighty irresponsible on our part.
Third, we have to be realistic about the scale of our business and what it takes to be effective and efficient in the messy and complex world of healthcare. Did you know that in a typical year, our entire operational staff, around 3,000 people, are paid using only 6% of our total inbound premiums, C-suite executives included? That’s it, the other 94% of premiums gets spent on other things like medical care and drugs for our members (around 85% of revenue) taxes, federal fees, IT upgrades, compliance costs, and the like. We run a very lean operation to maximize our value to you.
In fact, in this current environment of skyrocketing medical costs, if I cut everyone at LaBlue’s salary, from top to bottom, by 50%, the current rate of medical inflation would put that cost right back on us within 6 months. Trust me when I say, if you are upset about your healthcare premiums, or cost sharing, Louisiana Blue payroll costs are NOT the problem. But just to make sure, we reduced our workforce by 10% during 2025.
I hope this helps put some perspective around salaries of everybody who works here, including me and the CEO. We run a VERY lean ship, especially compared to the other health insurance companies out there. We are constantly maximizing our business model effectiveness to minimize the amount of cost we have to pass on to you. It’s a hard, never-ending battle, but one we know is worth fighting.
Thanks for the question and have a great day!…mrb