FEMA Hired Milliman To Write A New Algorithm, National Flood Insurance Costs From $808 To $1808

Sen. John Kennedy (R-La.) delivered a powerful specific example during April 2023 banking committee testimony — noting that “the new flood insurance rate in St. Mary Parish is $5,226 each” as a result of FEMA’s new algorithm. Kennedy criticized the devastating impact on affordable housing creation, pointing out that homeowners would need to pay “half of the cost of the home” in insurance alone. He urged witnesses to investigate FEMA’s policies, warning “they’re making it impossible to build affordable housing.”

The St. Mary Parish Example

Louisiana parish: Louisiana parish specific.
$5,226 rate: $5,226 flood insurance rate.
Coastal community: Coastal community.
FEMA impact: FEMA impact.
Local devastation: Local devastation.

The Additional Costs

Flood only: Flood insurance only.
Homeowners insurance: Additional homeowners.
Property taxes: Property taxes.
Liability insurance: Liability insurance.
Total burden: Total burden calculation.

The Affordability Crisis

Half home cost: Half home cost.
Insurance burden: Insurance burden.
Impossible affordability: “Impossible to build affordable housing.”
Market impact: Market impact.
Community devastation: Community devastation.

The Witness Response

Cannot speak to FEMA: “Can’t speak to FEMA.”
Agency separation: Agency separation.
Professional limitation: Professional limitation.
Specialty distinction: Specialty distinction.
Limited response: Limited response.

The Kennedy Approach

Specific examples: Specific examples.
Local detail: Local detail.
Political theater: Political theater.
Effective framing: Effective framing.
Constituent advocacy: Constituent advocacy.

The Policy Contradictions

Federal housing policy: Federal housing policy.
FEMA rate increases: FEMA rate increases.
Affordable housing goals: Affordable housing goals.
Inter-agency conflict: Inter-agency conflict.
Policy inconsistency: Policy inconsistency.

The Professional Plea

“Take a look”: “Take a look” request.
Witness engagement: Witness engagement.
Professional advocacy: Professional advocacy.
Collaborative approach: Collaborative approach.
Strategic alliance: Strategic alliance.

The “No Free Lunch”

Fiscal reality: Fiscal reality.
Economic principle: Economic principle.
Policy trade-offs: Policy trade-offs.
Consumer impact: Consumer impact.
Political messaging: Political messaging.

The Louisiana Context

Coastal exposure: Coastal exposure.
Flood history: Flood history.
Regional concern: Regional concern.
Political representation: Political representation.
Economic impact: Economic impact.

The FEMA Algorithm

Risk rating: Risk rating.
Milliman consulting: Milliman consulting.
Rate calculation: Rate calculation.
Policy implementation: Policy implementation.
Administrative decision: Administrative decision.

The National Impact

National average: National average.
Dollar increases: Dollar increases.
Regional variations: Regional variations.
Homeowner burden: Homeowner burden.
Economic effects: Economic effects.

The Affordable Housing Discussion

Policy debate: Policy debate.
Federal role: Federal role.
Market effects: Market effects.
Community impact: Community impact.
Economic development: Economic development.

The Congressional Oversight

Committee jurisdiction: Committee jurisdiction.
Legislative authority: Legislative authority.
Administrative accountability: Administrative accountability.
Democratic function: Democratic function.
Policy review: Policy review.

The Coastal Economy

Tourism impact: Tourism impact.
Fishing industry: Fishing industry.
Property values: Property values.
Community stability: Community stability.
Economic sustainability: Economic sustainability.

The Regional Disparities

Coastal vs. inland: Coastal vs. inland.
Risk-based rating: Risk-based rating.
Regional fairness: Regional fairness.
Population impact: Population impact.
Economic geography: Economic geography.

The Insurance Reform Debate

Actuarial accuracy: Actuarial accuracy.
Risk reflection: Risk reflection.
Program sustainability: Program sustainability.
Consumer protection: Consumer protection.
Political debate: Political debate.

The Homeowner Experience

Monthly costs: Monthly costs.
Budget impact: Budget impact.
Ownership decisions: Ownership decisions.
Financial stress: Financial stress.
Community stability: Community stability.

The Political Implications

Regional politics: Regional politics.
Electoral concerns: Electoral concerns.
Party dynamics: Party dynamics.
Community advocacy: Community advocacy.
Policy reform demands: Policy reform demands.

The Legislative Response

Congressional attention: Congressional attention.
Legislative reform: Legislative reform.
Budget process: Budget process.
Program authorization: Program authorization.
Administrative reform: Administrative reform.

The Economic Analysis

Cost-benefit: Cost-benefit analysis.
Consumer impact: Consumer impact.
Market effects: Market effects.
Economic development: Economic development.
Community sustainability: Community sustainability.

The Professional Standards

Actuarial principles: Actuarial principles.
Risk assessment: Risk assessment.
Insurance framework: Insurance framework.
Policy standards: Policy standards.
Administrative excellence: Administrative excellence.

The Kennedy Style

Folksy approach: Folksy approach.
Specific details: Specific details.
Effective critique: Effective critique.
Political theater: Political theater.
Constituent focus: Constituent focus.

The Policy Solutions

Rate reform: Rate reform.
Subsidization options: Subsidization options.
Regional adjustments: Regional adjustments.
Program restructuring: Program restructuring.
Administrative reform: Administrative reform.

Key Takeaways

Sen. Kennedy cited $5,226 flood insurance rate in St. Mary Parish, Louisiana.
He highlighted that insurance costs alone approach half the home’s cost.
Kennedy emphasized the devastating impact on affordable housing creation.
He called out contradictions between federal housing goals and FEMA actions.
Kennedy urged witnesses to examine FEMA’s impact on affordable housing.
He warned “they’re making it impossible to build affordable housing.”

Transcript Highlights

The following quotations are drawn from an AI-generated Whisper transcript of the hearing and should be considered unverified pending official transcript release.

“The new flood insurance rate in St. Mary Parish is $5,226 each as a result of FEMA’s action.” — Sen. Kennedy
“That doesn’t include homeowners. That doesn’t include property taxes. That doesn’t include liability insurance. That’s flood.” — Sen. Kennedy
“Now, how can you build an affordable home for someone when they have to pay half of the cost of the home when you add up all this insurance they have to carry and insurance?” — Sen. Kennedy
“Senator, I can’t speak to FEMA because I don’t know how they arrive at that.” — Witness
“Why don’t you take a look at what FEMA’s doing to the cost of building an affordable home in America because you’re not going to have any?” — Sen. Kennedy
“They’re making it impossible to build affordable housing. And I think the three of you respectfully ought to take a look at that.” — Sen. Kennedy

Full transcript: 174 words transcribed via Whisper AI.