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Idaho regulators are drafting guidance allowing insurers to market health plans that don’t comply with Affordable Care Act coverage requirements, in a move intended to provide lower-cost coverage to people unable to afford full-blown ACA plans.
The new plans would cover “most, if not at all of the essential health benefits,” that must be covered under the ACA, including physician services, inpatient and outpatient care, and prescription drugs, Idaho Insurance Director Dean Cameron told Bloomberg Law in a Jan. 8 telephone interview.
The 10 categories of essential health benefits “may not be covered in the same manner or mechanism that the ACA asks them to be covered” under the proposal, Cameron said.
Another avenue under consideration is increasing out-of-pocket maximum payments required of plan members before coverage kicks in. Another possibility is to let insurers impose separate out-of-pocket maximums for drug and medical benefits.
Cameron is acting under an executive order issued Jan. 5 by Idaho Gov. C. L. “Butch” Otter (R) which begins by saying that “Obamacare provisions and subsequent rules make healthcare coverage more costly and more difficult to afford.”
The executive order asserts that while a “sustainable risk pool attracts and retains an appropriate mix of younger and older Idahoans and between the healthy and those with illnesses,” the ACA—combined with rising costs—is “driving the young and healthy away from the insurance market, which leads to higher rates and has forced the Idaho insurance pool and market into a death spiral.”
Otter’s order cites the recent repeal of the individual mandate penalty imposed on people who failed to purchase ACA-compliant plans and Trump administration initiatives to increase state flexibility in forging health-care coverage solutions. It also authorizes Cameron to seek a federal waiver from having to comply with ACA requirements if necessary.
Cameron plans at this point to push forward without submitting a waiver, saying the first new health plans could be on the market by the beginning of April.
Asked whether he has received legal advice warning him that such a move could run afoul of the ACA, he said: “It would not have taken more than a year if we had not had a variety of discussion and opinion. The landscape in Washington has been changing, although at a snail’s pace. Each opening that has occurred has mitigated the concerns that some legal counsel have had.”
“Our goal is to issue guidance to the carriers within the new few days; before the end of the month,” Cameron said. “Some carriers have been working on ideas since the election because many felt that Obamacare would be repealed or replaced to have products in a post-ACA world. Hopefully, they will come up with products that meet our guidelines and are significantly lower in price.”
Asked if Blue Cross of Idaho has such a product, spokesman Bret Rumbeck told Bloomberg Law Jan. 8: “We are waiting to see what guidelines the Idaho Department of Insurance crafts.”
In the wake of Otter’s Jan. 5 order, Blue Cross of Idaho President and CEO Charlene Maher said: “We fully support this new state-led direction, as it will create more choices for consumers during these times of uncertainty.
“Governor Otter’s executive order ensures more options, lower prices and continued access to individual health insurance, especially for middle-class working people who don’t currently have health insurance because they can’t afford it,” Maher said.
“In the coming weeks, we will further evaluate any guidance issued by the Idaho Department of Insurance and determine the next steps we need to take to offer these new products to Idaho’s individual health insurance market,” she said.
Otter’s order requires that an insurer opting to provide coverage under the new guidelines must also offer an exchange-certified alternative. And Cameron said he foresees the new offerings having “minimal impact on the exchange.”
“The spiraling effects occurring here in Idaho are that the young and healthy are bounced off and choosing other ways: They’re buying short-term medical plans, or direct primary care arrangements or faith-based ministry programs,” Cameron said.
“We are trying to figure out how do you attract the young and healthy back into the marketplace with a product not quite as good as what they could get on the exchange, but maybe they don’t need it,” he said.
In his annual state of the state address to the Legislature Jan. 8, Otter told lawmakers he would be sending them a proposal to move the coverage of the people with the “most costly, medically complex conditions” to Medicaid during the course of the illness. He said the move does not expand Medicaid. But it will require a waiver, which Cameron said would soon be in the hands of the Centers for Medicare & Medicaid Services.
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