Why Idaho believes it can let insurers lift some Obamacare requirements

Jan. 05--Idaho wants to let insurers sell private insurance plans that don't comply with requirements of the Affordable Care Act, Gov. Butch Otter said Friday morning.

Such a move would be aimed at middle-class uninsured Idahoans, including the self-employed. Otter and other officials believe the market also could include people in Idaho's insurance gap, who can't afford insurance but don't qualify for Obamacare subsidies or Medicaid.

Those plans would be sold off of Idaho's health insurance exchange, at least at first. They are intended to encourage "the young and healthy" to rejoin insurance pools, to then benefit everyone's overall rates, said Dean Cameron, director of the state Department of Insurance.

It's unclear how the new proposal would interact with a separate set of waivers that Otter's administration plans to seek -- one that would shift people with expensive illnesses onto Medicaid, and one that would allow people who are poor but don't qualify for Medicaid to buy private insurance with federal subsidies.

The latest move was announced at an Associated Press-sponsored preview of the 2018 legislative session, which starts Monday. Otter and Lt. Gov. Brad Little during the event signed an executive order "restoring choice in health insurance for Idahoans" and directing Cameron to figure out how to make the plans happen.

Health insurers in Idaho and the state's insurance director have been working for months on a plan that would allow the sale of non-ACA compliant insurance. Cameron hopes to have plans available as early as March. The plans would not qualify for any sort of Obamacare subsidy.

The executive order attributes its timing to a recent move by Congress and the Trump administration: getting rid of the requirement for all Americans to have ACA-compliant health plans or pay a fine. That change, made in the recent tax overhaul, allows Idahoans to buy private insurance plans that don't meet all of the ACA's criteria, the executive order argues.

The order allows Cameron to seek a federal waiver, if needed, allowing Idaho to have non-compliant health plans.

Cameron told the Statesman that the insurance options Idaho wants to allow will not be "skinny plans that don't offer much benefit."

"They will be just as good or better than the grandfathered or grandmothered plans that are currently available in the marketplace," he said. "And frankly, they will be better than the short-term plans that are allowed under the ACA that we find many consumers are buying -- sometimes to their detriment."

The state will maintain seven key insurance requirements that were in place before the Affordable Care Act was enacted. But it may not require all 10 of the broad-ranging "essential health benefits" insurance plans have to offer under the ACA.

Otter and Cameron cited savings of 30 to 50 percent as a result of letting insurers sell non-ACA-compliant plans. Cameron said those savings are based on actuaries' estimates, after they ran the numbers on hypothetical changes to the insurance plans and marketplace. He declined to say what those hypothetical changes were, just that they are "components."

Cameron said the new plans would:

-- offer maternity coverage "at least as an option."

-- include preventive-care coverage, which he said saves money.

-- have no lifetime limits.

-- be offered to everyone; insurers couldn't deny enrollment.

-- not use factors like sex or medical-claims history to determine a person's premiums.

-- be "more attractive to the young and healthy."

-- be pooled together, for pricing purposes, with the more generous plans offered on Idaho's exchange. That would keep the price of exchange plans -- whose benefits tend to attract sicker people -- from being infinitely more expensive than the new pared-down plans.

Otter and Cameron said there's a possibility the plans could cut some pieces the ACA requires, such as pediatric dental coverage and mandatory prenatal coverage for everyone. Insurers also may be able to ask people "simplified questions" during enrollment that would affect the price they pay.

"There will be, again, added protections from where we were in the past, but maybe the pendulum isn't swung as far to the left as the ACA," Cameron said.

The changes are still being finalized, Cameron said.

The big question remains: if the plans don't revert to pre-ACA norms, where insurers could deny coverage to unhealthy people, offer skimpy benefits and put a cap on a person's benefit payouts -- then how will the plans cost 30 percent to 50 percent less?

Cameron said the guidelines he plans to release will make that clear.

Little talked of frustration with Washington, D.C., not doing more on health care. The new executive order is "critical," he said. Otter and Little plan to tour the state over the next few weeks to promote the directive.

Little is running for governor in 2018. Otter defended the lieutenant governor's involvement in the high-profile announcement because of Little's previous work and denied that it was part of an effort to boost his gubernatorial campaign. Otter endorsed Little after deciding not to run for a fourth term.

Friday's executive order appears to be the first jointly signed by Otter and Little, according to a Statesman review of all executive orders Otter has signed since taking office in 2007. Little has signed two other executive orders on his own, both last year at times he was serving as acting governor.

The move sparked criticism from Little's political opponent, Boise developer and physician Tommy Ahlquist, who has been critical of Otter's closeness to Little's campaign as it nears election day.

"Sadly, this is just the latest example of Boise's career politicians trying to win an election campaigning on Idaho taxpayer dollars. Brad Little supported Idaho's Obamacare exchange, but now says he's against it. Fascinating," said David Johnston, campaign manager for Ahlquist.

Little did not come out against the exchange on Thursday. The exchange would remain in place under the executive order.

U.S. Rep. Raul Labrador, who is also running for governor, did not immediately return a request for comment from the AP.

Blue Cross of Idaho, one of the companies that offers plans on Idaho's exchange, quickly sent out a prepared statement in support of the new plans.

"Gov. 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. 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," said Charlene Maher, the company's president and CEO.

Audrey Dutton: 208-377-6448, @IDS_Audrey

Nate Poppino: 208-377-6481, @npoppino

The Associated Press and the Statesman's Cynthia Sewell contributed.

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