Idaho insurance exchange going strong, but ‘gap’ population still unaddressed

BOISE – For more than 86,000 Idahoans, health care reform has meant new, affordable options for health coverage, with an average premium, after federal subsidies, of just $65 a month.

“Clearly, we offer a service that was needed,” said Pat Kelly, executive director of Your Health Idaho, Idaho’s state insurance exchange. “Eighty-six thousand people in Idaho certainly demonstrates a need for what we do.”

But for another 78,000 Idahoans, health care reform has brought nothing but unfulfilled promises. They make too little to qualify for the subsidized coverage, which was envisioned to serve people making 100-400 percent of the federal poverty level. They make too much to enroll in Idaho’s Medicaid program, which mostly covers children and the disabled. They’re part of a coverage gap that affects residents of states like Idaho that didn’t accept federal funds to expand Medicaid to cover low-income, nondisabled adults.

About 54,000 of those who fall into that coverage gap applied for coverage on Idaho’s state health insurance exchange during last year’s open enrollment, only to be turned away.

“It’s pretty telling that people really wanted to get something, and just couldn’t because they were too poor,” said Stephen Weeg, board chairman of Idaho’s exchange and a member of Gov. Butch Otter’s Medicaid task force, which has been calling for Idaho to address the coverage gap for the past three years. In September, a 36-year-old Idaho Falls woman who fell into that gap died of an asthma attack, though earlier, routine treatment could have saved her.

Many Idaho officials remain skeptical that federal subsidies are sustainable. They worry that the state’s historically low insurance prices will become a thing of the past, as insurers face new mandates to cover mental health care and other areas the state never required them to include in their policies in the past.

“We have no confidence that the premium tax credit approach will survive another administration,” said Idaho Department of Insurance Director Dean Cameron, a Republican who co-chaired the Legislature’s budget committee from 2001 to 2015 and worked as an insurance agent before taking the state post this year. “Did the federal government take on more than it can afford?”

Cameron recalls customers coming to his insurance business to purchase health insurance after a cancer diagnosis, with surgery already scheduled, and in the eighth month of pregnancy, with the insurer required to fully cover the delivery the next month. In the past, those customers would have had to pay months of premiums before their insurance would cover those costly items, but under the Affordable Care Act, they can’t be turned away because of pre-existing conditions.

Cameron said as a result, major Idaho insurers are now paying out more in claims than they’re collecting in premiums in the individual plan portion of the health insurance market.

“The ACA dramatically changed the rules, and they, in my opinion, have disrupted the marketplace,” he said.

“Obamacare” was so unpopular among Idaho’s Republican politicians that it took a multiyear fight for Gov. Butch Otter to persuade lawmakers to set up a state insurance exchange, rather than let the federal government run Idaho’s exchange; Idaho lawmakers simply wanted no part in it. Idaho’s exchange used the federal exchange’s technology platform for its first year, then transitioned to its own in 2014.

But Idaho’s exchange has been an unqualified success. Per-capita enrollment in insurance plans through Idaho’s exchange ranks fourth in the nation, and it’s the highest of any state with a state-based exchange. The exchange receives no state funds; federal grant money started it up, but its sole funding source for the future will be a 1.99 percent assessment on the health plans it sells, up from 1.5 percent the first two years. The federal exchange charges 3.5 percent.

“I think our state exchange is the model for the nation,” Cameron said. “Idaho is held out there as an example of a model that is sustainable. It was the only choice we had to keep the federal government, as best we can, at bay on people’s health care decisions.”

Unlike some states, Idaho opted to give the state’s insurance brokers and agents a big role in the exchange; 70 percent of those who sign up with the exchange use an agent or broker.

“They’re the experts, and there’s no charge to use them,” Kelly said. “We do know that Idahoans like to hear things from other Idahoans.”

Consumers with complaints about their experience can turn to Cameron’s department; if Idaho had opted for a federal exchange, the state department wouldn’t have a role.

Close to 90 percent of those who have bought health plans on the exchange qualify for some type of subsidy. And even though premiums will rise next year, so will tax credits.

“I think they’ll be surprised at the affordability,” Kelly said.

Jacqueline Maurer, a former social worker from Post Falls, went without insurance for several years after she lost her job. The divorced mother decided to start up a home day care so she could be home with her young children. Her kids were covered, but she couldn’t afford coverage for herself.

Last year, she met with an insurance agent about plans through the exchange and ended up with coverage that suited her needs – and gave her choices among doctors in the area – for $49 a month. “I’m a pretty healthy person,” she said, “but it still gives me such peace of mind to know that it’s there if something did happen.”

In 2016, when the Affordable Care Act’s phased-in penalty for those who fail to purchase health insurance more than doubles to $695 per adult, or 2.5 percent of income, whichever is higher, the penalty will come close to equaling what Idahoans would pay to simply buy subsidized insurance on the state exchange.

“In Idaho, we’re going to focus on affordability, for consumers who may have thought health care was out of reach,” Kelly said.

Changes at the Idaho exchange for 2016 include options to purchase adult dental coverage, which wasn’t previously offered and isn’t required by the Affordable Care Act; and an end to high-end “platinum” plans, which only 3 percent of Idaho exchange customers were choosing, and which also aren’t required by the federal law.

Those platinum plans are going away because insurance carriers decided not to offer them anymore.