Idaho looks at Montana model amid rising health insurance costs

Sep. 18—BOISE — A committee of Idaho legislators continued its study of health insurance in the state on Tuesday, with an examination of Montana's response to rising costs and suggestion for the formation of an ongoing legislative committee to examine healthcare issues each year.

Committee members heard from the administrator of Montana's health benefits program, Amy Jenks, for an overview of how one of Idaho's neighbors operates its self-funded state health insurance program.

Highlighting a characteristic distinct from Idaho, Jenks explained the state of Montana's use of reference-based pricing (RBP). The form of cost control was implemented by the state in 2016 and sets a fixed payment limit across facilities in the state benchmarked to Medicare reimbursement rates.

This change effectively "removed that spread" in equivalent treatment costs from one facility to the next, Jenks said.

Though Jenks pointed to Montana's state health expenses remaining relatively flat over a 10-year span, the plan has started to run a deficit at an average of $141 per month per enrollee, as was reported by the Billings Gazette.

Among the current cost drivers pointed to by Jenks were increasing demand for mental health and substance use disorder treatment, increased utilization of GLP-1s for Type 2 diabetics and gene therapies that, in some cases, carried $1 million in annual expenses.

"We control our costs, we control our expenditures, but some of these things are often outside of our control," Jenks said. "Whether we're self-funded or fully insured, these are things that our members need and can be very expensive to the plan."

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When looking at funding and expenditures for fiscal year 2025, Jenks laid out that the state saw a loss in the program, with $215 million in revenues and $246.6 million in expenses for 28,000 plan members, which include current state employees, legislators, retirees and respective dependents.

Noting the current strains on that system, Director of the Idaho Department of Insurance Dean Cameron expressed pointed reservations about moving Idaho to a similar self-funded program, which requires employers to pay for claims as they occur.

The move would be a departure from the state's hybrid structure for health insurance. Under the current framework, when claims fall below this amount, funds are returned with interest. If claims go beyond estimates, the state pays up to a pre-determined threshold.

"I'm personally a fan of our current system because it protects us," Cameron said.

As an example of drawbacks associated with wholly self-funded plans, Cameron pointed to recent fallout associated with the Idaho School Benefit Trust Program. Idaho Education News has reported the self-funded program — which pools claims from 108 school districts, charter schools and education organizations — has a shortfall of $13 million for the current year's benefit claims.

Cameron said the Department of Insurance has opened an investigation to determine what happened with the goal of getting answers to how the fund came to be insolvent in the coming months.

In August, the epartment declared the trust to be "in hazardous financial condition" and petitioned to be allowed to serve as the rehabilitation for the trust. IDOI has arranged for the Blue Cross of Idaho, the current plan administrator, to lend the trust money to pay claims promised to employees for the 2025-26 plan year, a release from the agency said.

"We've seen with the school benefit trust what potentially happens with the self-funded plan," Cameron said. "I would not want to be the individual who has to go and ask the legislature for more money because we all of a sudden had ... significant losses."

Future of the working group

Cameron, a former member of the Idaho Senate, also sought to convey the benefit of establishing a body to review health insurance-related issues in the state on an annual basis in what would be a departure from the one-time formation of this year's working group.

During his time as a state senator, Cameron noted he served on an ongoing healthcare task force addressing healthcare issues throughout the summer.

"It proved to be an extremely useful committee to tackle really difficult and important subjects and challenges that we're all facing, that consumers face, that our businesses face and that Idahoans face," Cameron said. "It might be time to consider dusting that process off."

Sen. Kevin Cook, R-Idaho Falls, pushed back against the proposal on the grounds that issues pertaining to health insurance complaints and similar matters are already managed by several state entities.

"As a part-time legislator, I just thought, 'Why would we want to do that?'" Cook said. "We have (the) Office of Group Insurance, we have our Department of Health and Welfare, we've got (the) Department of Insurance — that's their job."

Cameron responded that the utility lies in better aligning the state legislature with the needs and responsibilities of these groups, as they are all beholden to the laws passed during the legislative session.

"The reason why you would have it is because you are the public policy-making body," Cameron said. "You are the entity that decides what the public policy of the state is. What I do, what the Department of Administration does, what the Office of Group Insurance does is enforce the public policy that you have set forth."

When the working group was formed earlier this year, it was done so with the primary aim of resolving a dispute between Portneuf Medical Center, an East Idaho hospital, and Regence BlueShield of Idaho, the medical plan administrator for Idaho state employees.

The contract between the two entities expired June 15, making an estimated 3,000 members who had a claim at the facility in the last year no longer eligible for in-network care, as previously reported by the Lewiston Tribune.

Two months later, Portneuf and Regence reached a three-year deal to restore network access for state employees on Aug. 15.

Nate Carter, the chief executive officer of Portneuf Health, appeared before committee members on Tuesday and expressed gratitude for the effort put forward to assist with resolving the contract dispute, but he also highlighted ongoing issues that have meant, without intervention from the IDOI, some patients would have gone without life-saving care.

Carter, echoing Cameron, also said the state could stand to benefit from the committee's scope being more wide-reaching.

"This committee is meant for a much larger purpose," Carter said, "which is to to assist providers and insurers both in working together to make sure that patients, my neighbors, my friends, and my family have access to high-quality care in their respective communities."

As for the immediate future of the committee, legislators are set to reconvene for another health insurance-related discussion on Oct. 14.

McCandless covers Idaho politics for the Lewiston Tribune, Moscow-Pullman Daily News, Idaho Press of Nampa and Coeur d'Alene Press. He may be contacted at [email protected].

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