- Open enrollment for 2022: Window shopping begins October 1, 2021; enrollment starts November 1, still slated to end December 15.
- Short-term health plans can be sold in Idaho with initial plan terms up to 364 days; “enhanced” short-term plans are available from SelectHealth and Blue Cross of Idaho.
- Insurers have proposed an average rate decrease of 2% for 2022.
- Rate increases were significant from 2016 through 2018, but have been much more modest since then.
- Medicaid expansion took effect in 2020; more than 111,000 people covered by August 2021.
- Enrollment in Idaho’s exchange peaked in 2016, but dropped in 2020 due to Medicaid expansion and again in 2021.
- Insurer participation in Idaho’s exchange is more robust than most states
- CMS rejected Idaho’s plan to allow insurers to sell non-ACA-compliant plans, but new “enhanced” short-term plans are an approved approach.
- What was Idaho proposing with their “state-based” plans?
- “Expanded bronze” plans became available as of 2018
Idaho exchange overview
Idaho has a state-run exchange, Your Health Idaho. The state used HealthCare.gov’s enrollment platform during the first open enrollment period, but transitioned to its own enrollment platform in time for the second open enrollment period, and has been successfully using it ever since.
In 2020, when the pandemic was beginning, Your Health Idaho was the only fully state-run exchange that did not open a COVID-19 special enrollment period for people without health insurance (and without a qualifying event). The state explained that this was because “enhanced” short-term plans are available year-round in Idaho, but it’s important to note that those plans can have pre-existing condition waiting periods. In 2020, it was only the fully state-run exchanges (with the exception of Idaho) where COVID-related enrollment windows were available; the Trump administration refused to open one on HealthCare.gov.
But for 2021, COVID-related enrollment periods had already been announced for DC and the other 49 states, leaving Idaho as the lone exception until they announced in mid-February that they’d offer one. The enrollment window in Idaho ended on April 30, 2021, which was several months before the deadlines in most other states. Enrollment was open to new and existing customers during the COVID/American Rescue Plan enrollment window. Existing enrollees only had the option to switch to another plan offered by their current insurer, but Your Health Idaho’s insurers also agreed to carry over deductibles and copay amounts that members had already paid, so that they would be credited to the new plan.
Enrollment in Your Health Idaho plans hit an all-time low for 2021, but the additional enrollment window in March and April 2021 resulted in an uptick in enrollment, as was the case nationwide in 2021.
While the majority of exchanges across the country had at least one carrier exiting at the end of 2016, all of Idaho’s exchange carriers continued to participate in the exchange in 2017. Unlike many states, there were more plan options (including dental) for consumers in 2017 than there were in 2016 in the Idaho exchange. As of 2018, BridgeSpan left the exchange in Idaho, but Your Health Idaho remained one of the more robust exchanges in the country in terms of carrier participation, with four insurers offering plans in 2019 and 2020.
And for 2021, Regence BlueShield of Idaho joined the exchange — after previously offering off-exchange coverage — bringing the total number of participating individual market insurers to five. All five insurers plan to offer coverage for 2022, with a preliminary proposed average rate decrease of 2%.
Governor Otter signed S.1288 in March 2018, allowing out-of-state insurers to sell health insurance policies in Idaho as long as they’re licensed and in good standing in the state in which they are domiciled, provide coverage for Idaho’s state-mandated benefits, and pay Idaho’s premium tax and high-risk pool fees. The legislation allows Idaho to enter into compacts with other states to allow for interstate insurance sales. Several other states have passed similar legislation in recent years, including Oklahoma, Georgia, Kentucky, and Maine, but individual market insurers have shown little interest in selling policies across state lines, in part because the insurers don’t tend to have interstate provider networks.
When can I enroll in health coverage in Idaho?
Open enrollment for 2022 coverage begins November 1, 2021, although plans will be available for anonymous window shopping as of October 1. Open enrollment for 2022 plans is currently scheduled to end December 15 (people who apply by that day have until December 22 to complete their plan selection).
For states that use HealthCare.gov, HHS has extended the open enrollment period to continue through January 15. But they clarified that states that run their own exchanges (like Idaho) can have an earlier deadline, as long as it’s not before December 15. So Idaho is allowed to continue to use the December 15 deadline if they choose to do so.
Enrollment in Medicaid/CHIP continues year-round. And Native Americans are also eligible to enroll year-round.
The open enrollment window that begins November 1 is specific to individual market plans, including those sold through Your Health Idaho as well as off-exchange plans (purchased directly from health insurers). But it does not apply to people who get their coverage from an employer. And there’s a separate (but overlapping) enrollment window that applies to Medicare coverage.
Your health Idaho offered a COVID/American Rescue Plan enrollment window in the spring of 2021, but it ended on April 30, which was much earlier than the deadlines in other states. Since that window ended, enrollment in 2021 coverage in Idaho has only been available for people who experience a qualifying life event.
Which insurers offer coverage in the Idaho marketplace?
As of 2021, there are five insurers that offer exchange plans in Idaho. That includes one newcomer: Regence BlueShield of Idaho offered individual market coverage in the state as of 2020, but only outside the exchange (enrollment was fairly low, at just 1,200 people). Regence joined the exchange for 2021, bringing the total number of participating exchange insurers to five. (Regence also joined the exchange in Washington for 2021, as well as the exchange in Oregon, after previously offering off-exchange coverage.)
The following insurers offer plans in the Idaho exchange, with plan availability varying from one location to another:
- Blue Cross of Idaho
- Mountain Health CO-OP
- Select Health
- Regence BlueShield of Idaho
2022 rates and plans: Insurers have proposed an average premium reduction of 2%
The Idaho Department of Insurance announced proposed average rate changes for 2022 coverage in August 2021. The following average rate changes have been proposed for individual market plans for 2021, amounting to an overall average rate decrease of about 2%:
- Blue Cross of Idaho: 2% decrease
- Mountain Health CO-OP (an ACA-created CO-OP): 1% increase
- SelectHealth: 1% decrease
- PacificSource: 0% average rate change
- Regence BlueShield of Idaho: 2% increase
The rate proposals are under review, and will be finalized by the Idaho Department of Insurance before October. Consumers in Idaho will be able to start window-shopping for 2022 coverage on October 1, 2021, and open enrollment will begin November 1.
A look at previous rate changes in Idaho’s exchange
The Idaho Department of Insurance does not have the authority to prevent health insurers from implementing rates that are deemed unjustified. But they do have a review and negotiation process during which they analyze the rates that have been filed for the coming year and work with carriers to ensure that proposed rates are actuarially justified, and it’s common for final rates in Idaho to be considerably different from what the insurers initially propose.
Here’s a look at how premiums have changed in Idaho over the years. Note that these rate changes are calculated before subsidies are applied; for people who receive premium subsidies, the subsidies grow to keep pace with the benchmark plan in each area, largely offsetting changes in premiums.
2016: An estimated average rate increase of 20 percent, ranging from an 8 percent decrease for PacificSource, to a 26 percent increase for Montana Health CO-OP.
Kaiser Family Foundation analyzed data on benchmark plan (second-lowest-cost Silver plan) premium changes from 2015 to 2016 in metropolitan areas across the country. In Boise, they found that the average benchmark plan for a 40-year-old non-smoker would be increasing from $210/month to $273/month – a 30 percent increase, which is three times the average they found nationwide. But that’s before premium subsidies were applied; most enrollees receive subsidies, and the subsidies change to keep pace with the cost of the benchmark plan.
2017: Average increase of 24 percent, ranging from 15 percent for PacificSource, to 29 percent for SelectHealth.
2018: Average rate increase of 27 percent, but much of that was due to the termination of federal funding for cost-sharing reductions (CSR). The average approved rate increases for silver plans in Idaho (for on-exchange insurers) were much higher than the overall averages, at 44 percent (the average rate increase for bronze and gold plans was 11 percent and 9 percent, respectively).
2019: Average increase of 5 percent, ranging from a 1 percent decrease for SelectHealth, to a 10 percent increase for Blue Cross of Idaho and PacificSource. The cost of cost-sharing reductions continues to be added to silver plan rates in 2019.
Although the federal government is no longer requiring meaningful differences in the plans that a carrier offers in the exchange, Idaho is continuing to require each insurer to have meaningful differences among their various plan offerings (this is detailed on page 15 of the state’s letter to issuers).
2020: Overall, the average rate increase for 2020 was about 6 percent, versus the proposed overall average increase of 7 percent that insurers had initially proposed. Average rate changes ranged from a 1 percent increase for Regence (off-exchange only in 2020) to an 8 percent increase for SelectHealth.
2021: Overall, the average rate increase for 2021 was about 1%, although three of the state’s insurers reduced their average premiums for 2021.
Medicaid expansion took effect in 2020; more than 111,000 people covered by August 2021
A significant change in Idaho for 2020 was the expansion of Medicaid under the terms of a ballot initiative that voters passed in the 2018 election. Medicaid expansion took effect in many states in 2014, and Idaho joined them as of 2020. Through 2019, premium subsidies were available through Your Health Idaho for people with income from 100% to 400% of the poverty level. But as of 2020, people with income between 100% and 138% of the poverty level are instead eligible for expanded Medicaid.
This has been a hotly contested point in Idaho. The state submitted a waiver proposal to the federal government, seeking permission to give these individuals a choice between Medicaid and subsidized plans in the exchange, but CMS rejected that proposal in August 2019. The agency indicated that the waiver proposal wasn’t complete, but that the concept wouldn’t be approvable even with revisions. Governor Little and Idaho’s legislative leaders expressed surprise and disappointment that the waiver proposal was rejected, and said that they would continue to work towards federal approval for their “coverage choice” concept. (As described below, this is not the first time that CMS has rejected a proposal from Idaho.)
However, the legislation that initiated the state’s efforts to modify the expansion of Medicaid (with the “coverage choice” proposal and a Medicaid work requirement that will also need federal approval) did clarify that full expansion would be implemented if the state was unable to obtain federal approval for a modified approach. So people with income between 100 and 138 percent of the poverty level became eligible for Medicaid as of January 2020, instead of premium subsidies in the exchange.
Enrollment in expanded Medicaid in Idaho began November 1—the same day that open enrollment started for qualified health plans in the exchange—and coverage took effect starting January 1, 2020. More than 111,000 people had enrolled as of August 2021. It’s important to note that for the duration of the COVID public health emergency period, states cannot disenroll people from Medicaid, even if they experience a change in income that would normally make them ineligible (residents can be disenrolled if they move out of state or request that their coverage be terminated). So enrollment in Medicaid has trended upward nationwide throughout the pandemic, with more than 81 million Americans covered by Medicaid/CHIP as of 2021.
Your Health Idaho enrollment: 2014 – 2021
Here’s a look at how enrollment in private individual market plans (during open enrollment) through Your Health Idaho has changed each year:
- 2014: 76,061 people enrolled
- 2015: 97,079 people enrolled
- 2016: 101,073 people enrolled
- 2017: 100,082 people enrolled
- 2018: 94,507 people enrolled
- 2019: 94,430 people enrolled
- 2020: 78,431 people enrolled
- 2021: 68,832 people enrolled
Your Health Idaho’s enrollment reports (examples here and here) tend to have higher numbers than the CMS reports, because they include people who enrolled only in dental coverage, as well as those who signed up for medical plans (the CMS reports only count medical plans).
Nationwide, enrollment in the exchanges peaked in 2016 and has declined since then, for a variety of reasons. Some—like the Trump administration’s budget cuts for HealthCare.gov—don’t affect state-run exchanges like Your Health Idaho. But others, such as the elimination of the individual mandate penalty and the new federal rules that expand access to short-term health plans, have affected enrollment in Idaho. Premium increases have also played a role; although they’re mitigated by larger subsidies for people who are subsidy-eligible, people who don’t get premium subsidies must shoulder the full burden of rate hikes, and coverage has become unaffordable for some.
And for 2020, it was expected that enrollment in private plans through the exchange would decline significantly as a result of Medicaid expansion. People with income between 100 and 138 percent of the poverty level are now eligible for Medicaid in Utah instead of premium subsidies in the exchange. The “enhanced” short-term health plans that became available in Idaho as of 2020 may have also contributed to the decline in exchange enrollment.
For 2021, part of the decline in enrollment is related to the fact that people transitioned to Medicaid if their income dropped below 138% of the poverty level (even if only for a short time; Medicaid eligibility is based on current monthly income as opposed to annual income). And during the COVID public health emergency, states are not allowed to disenroll people from Medicaid unless the person requests it or moves out of state; eligibility redeterminations are not allowed (this is for states that are receiving the increased federal Medicaid funding during the pandemic; all states opted into this). But the drop in enrollment in Idaho was substantial, and far more than most other Medicaid expansion states experienced in 2021.
Insurer participation: 2014 – 2022
A new insurer was approved by the Idaho Department of Insurance for 2015: Mountain Health CO-OP, which is the Idaho branch of Montana Health CO-OP. The CO-OP joined Blue Cross of Idaho, BridgeSpan Health Company, PacificSource Health Plans, and SelectHealth, all of which returned to the exchange for 2015.
The same five carriers offered coverage in 2016 and 2017. But BridgeSpan exited the market at the end of 2017 (they initially planned to offer off-exchange plans in 2018, but ultimately left the individual market altogether), and SelectHealth reduced their coverage area for 2018.
Compared with the rest of the country, however, Idaho remained among the states with the most robust exchanges in terms of insurer participation for 2018. Most counties in the state had four insurers offering plans in the exchange, and 12 counties had three. There were only a handful of other states where most counties had four or more insurers offering exchange plans for 2018.
Your Health Idaho confirmed by email in December 2017 that while BridgeSpan enrollees and eastern Idaho enrollees with select Select Health plans were being mapped to comparable plans (assuming they didn’t pick their own new plan by December 15), there was no special enrollment period for BridgeSpan or SelectHealth members who had coverage through Your Health Idaho.
The exchange noted that the comparable plans selected on behalf of these enrollees were the least expensive plan at the same metal level as the consumer’s 2017 plan, and that this was based on guidance from the Idaho Department of Insurance. Enrollees with terminating BridgeSpan and Select Health coverage were notified of the impending plan cancellation and the plan that the exchange intended to map them to, and they were able to pick their own plan instead between November 1 and December 15. But there was not a special enrollment period for people who were mapped to a new plan by the exchange (this is in contrast to people in similar situations in states that use HealthCare.gov, where the special enrollment period is available, even after the exchange picks a replacement plan).
Other than BridgeSpan’s exit, Idaho’s exchange has had very consistent insurer participation over the years. Blue Cross of Idaho, Mountain Health CO-OP, SelectHealth, and PacificSource all continued to offer plans in the exchange for 2019, and again in 2020.
Starting in 2016, there were not any Platinum plans available in the Idaho exchange. Only about 2 percent of Idaho exchange enrollees selected platinum plans in 2015, and the carriers opted not to offer those plans starting in 2016, as they aren’t required by the ACA and clearly were not a popular choice among enrollees.
For 2021, Regence BlueShield of Idaho is joining the exchange, after previously offering off-exchange plans. So there are five on-exchange insurers as of 2021: Regence, Blue Cross of Idaho, Mountain Health CO-OP, PacificSource, and SelectHealth. All five will continue to offer coverage for 2022 as well.
Idaho’s approach to the CSR funding uncertainty and eventual termination
The Idaho Department of Insurance clarified that for 2018, “the proposed rate increases for silver-level plans on the exchange are significantly higher this year because cost-sharing reduction subsidies are assumed to not be funded by the federal government.” This assumption was correct, as the Trump Administration cut off CSR funding in October 2017, just before the start of open enrollment for 2018 coverage.
According to the Idaho Department of Insurance, insurers didn’t have leeway to create new, similar-but-not-identical off-exchange plans at the silver level for 2018 (that’s the approach that California used). Since on-exchange carriers that offer the same plan off-exchange are required to charge the same price on and off-exchange, the additional premium to cover the cost of CSRs was spread across the on and off-exchange silver plans in Idaho, unless the plan is offered only outside the exchange (this would be the case with all of Regence Blue Shield’s silver plans, since Regence doesn’t offer plans in the exchange).
Instead, insurers in Idaho created new “expanded bronze” plans, using the new de minimum range (-4/+5) that applies to bronze plan actuarial value starting in 2018 (this extended actuarial value range was part of the market stabilization rule that HHS finalized in April 2017). So insurers in Idaho began offering bronze plans with 65% actuarial value as of 2018. Compared with prior years’ actuarial value rules, this is in between a silver and a bronze plan, which have typically had actuarial values of roughly 70% and 60%, respectively.
For silver plan enrollees in the exchange who are receiving premium subsidies, the additional CSR-related premium load on silver plans is covered or mostly covered by commensurately larger premiums subsidies. And for enrollees in other metal levels who are receiving premium subsidies, net premiums are more affordable than they were in 2017, as the larger premium subsidies (to account for the CSR load on silver plans) can be applied to plans at other metal levels that don’t have the CSR load added to their pre-subsidy premiums.
For non-silver plan enrollees who aren’t receiving premium subsidies, the cost of coverage has increased in line with normal annual rate increases, but the CSR load isn’t a factor, since it’s only being added to silver plans.
For silver plan enrollees who aren’t receiving premiums subsidies, however, the full weight of the higher rates (driven in large part by the cost of CSR) began to apply in 2018. These enrollees could keep their silver plans, but many have found the new “expanded bronze” plans, on or off-exchange, to be a better — and much less expensive — fit. Expanded bronze plans continue to be an option in Idaho.
Premium subsidies (which are different from cost-sharing reduction subsidies) are based on the cost of silver plans in the exchange. So an approach like Idaho is taking (ie, applying the higher rates that come with a lack of CSR funding to silver on-exchange plans and the same silver plans offered off-exchange, rather than spreading them out across all plans) results in larger premium subsidies, as the subsidies grow to keep pace with the increasing silver plan premiums. Bronze and gold plans become an even better value for people who receive subsidies, as the larger subsidies are applicable to those plans too, despite the fact that the additional premiums to account for the lack of CSR funding is only added to silver plans.
The subsidies are actually just tax credits, which means the Trump administration is taking from one hand to give to the other (ie, not funding CSRs, but having to pay out more in premium subsidies). The people who end up bearing the brunt of the rate increases are those who don’t qualify for premium subsidies. That includes a few different categories of people:
- middle class (and upper class) Idaho residents who earn more than 400 percent of the poverty level.
- people caught in the family glitch.
- people who earn less than the poverty level and are stuck in the coverage gap due to Idaho’s rejection of Medicaid expansion funding.
And as noted above, the people who bear the brunt of the additional premiums are only those who purchase silver plans (on-exchange, or the same qualified health plan sold off-exchange) and don’t receive premium subsidies.
Idaho Insurance Director Dean Cameron has made it clear in past statements that he supports GOP efforts to repeal and replace the ACA. Cameron also supports a provision like the Cruz Amendment to the Better Care Reconciliation Act, which would have allowed non-ACA-compliant plans to be sold off-exchange. These plans would certainly be less expensive, so if your only priority is lower premiums, this seems like a valid solution. But they would serve to destabilize the individual insurance market. Healthy people would opt for the less-robust plans (particularly if insurers were allowed to use medical underwriting to offer lower premiums to healthy people, as would have been the case under the Cruz Amendment), leaving sicker people on the ACA-compliant plans, which causes higher premiums, which drives more healthy people towards the non-compliant plans, and so on, until you end up with a death spiral.
Cameron has also called for federal reinsurance, which is a valid solution. The ACA included a reinsurance program, but it was temporary and only lasted through 2016. Reinstating it on a permanent basis would certainly serve to stabilize the insurance markets and minimize premium increases. As an alternative, several states have implemented their own reinsurance programs, although Idaho is not yet among them.
CMS rejected Idaho’s plan to allow insurers to sell state-based plans that aren’t compliant with the ACA, so Idaho has created “enhanced” short-term plans instead
Since President Trump took office, there has been considerable discussion about legislative and regulatory changes at the federal level that would allow individual and small group plans to be sold without complying with the full suite of ACA regulations. None of the legislative changes were enacted, although some of the regulatory changes were implemented (for example, expanded access to association health plans, and the relaxed rules for short-term health plans).
States also have the option to submit 1332 waivers that (if approved) would allow them to get around some of the ACA’s requirements. But Idaho’s Department of Insurance opted to simply take the bull by the horns and issue a regulatory bulletin in 2018, outlining a new protocol for allowing insurers in Idaho to sell “state-based health benefit plans” that would avoid many of the ACA’s regulations. The bulletin came three weeks after Governor Butch Otter issued an executive order calling on regulators to devise methods for “restoring choice in health insurance for Idahoans.
University of Michigan law professor, Nicholas Bagley, called Idaho’s bulletin “crazypants illegal” and health policy experts expressed varying degrees of skepticism over the chances that the state’s new regulations would stand up to legal scrutiny. In March, after weeks of speculation over whether the federal government would step in to uphold federal law in Idaho, CMS sent a letter to Governor Otter and Idaho Insurance Commissioner, Dean Cameron, explaining that the “state-based” plans would run afoul of the ACA, and if Idaho were to proceed with implementing them, CMS would have to step in and enforce the ACA on behalf of the state. But CMS went out of their way to clarify that they don’t think the ACA is serving the people of Idaho well, and that they appreciate the state’s efforts to essentially circumvent the law. Idaho’s “state-based” plans were simply too much a stretch.
CMS clarified that if Idaho failed to enforce the ACA and CMS had to begin enforcing the law instead, the agency would issue cease and desist letters to any insurer offering “state-based” plans in Idaho (Blue Cross of Idaho had previously stated their intent to begin offering “state-based” plans under the terms of Idaho’s regulatory bulletin). If the insurer continued to offer the plans, it would be subject to financial penalties of up to $100 per day, per individual enrolled in the non-compliant plans.
But CMS went on to state that the agency believes that “with certain modifications,” Idaho’s “state-based” plans could instead be offered as short-term plans, which are exempt from the ACA’s regulations. The federal government has since finalized new regulations that allow for much longer short-term plans, unless a state imposes its own restrictions. Idaho allows short-term plans to have initial terms of up to a year, and although the state previously banned renewal of short-term plans, legislation was enacted in Idaho in 2019 to allow for “enhanced” short-term plans, which will be renewable if the policyholder chooses that option.
Blue Cross of Idaho is the first insurer to create “enhanced” short-term plans (although SelectHealth appears poised to do so as well). The BCBSID Access Plans will be available for purchase as of December 2019. According to the plan filings for the new Access Plans (SERFF filing number BCOI-132140320), the policies will be guaranteed-issue, but with premiums based on medical history. They’ll be renewable for up to 36 months of coverage, and although they’ll have a 12-month waiting period for pre-existing condition coverage, the waiting period can be reduced or eliminated if you had creditable prior coverage (this is how pre-existing condition waiting periods worked on employer-sponsored plans before the ACA eliminated them altogether). The new Access Plans have some features that resemble ACA-compliant plans, such as premiums only being charged for up to three children under the age of 21 on a family’s plan, and free preventive care. And they cover maternity care, mental health care, and prescription drugs, all of which are benefits that are often excluded on traditional short-term plans. But the Access Plans have out-of-pocket caps that can be as high as $50,000, and as mentioned above, they also base premiums on medical history, which isn’t allowed on ACA-compliant plans.
What was Idaho proposing?
At Health Affairs, Katie Keith has an excellent overview of what Idaho’s bulletin would have allowed and the implications of what would have happened if insurers had started offering these “state-based” plans. In summary, the bulletin includes the following regulations:
- An insurer would only be allowed to offer a state-based plan in a given area if the insurer also offers at least one ACA-compliant plan in that area.
- Enrollment would be available year-round (ie, no open enrollment period).
- Coverage in state-based plans would be guaranteed-issue (ie, applications could not be rejected based on medical history), but applicants could be charged higher premiums (up to 50 percent above the plan index rate) based on their medical history.
- Pre-existing conditions could be subject to a waiting period before coverage applies, but that waiting period would be waived if the consumer had proof of continuous prior coverage.
- Most of the ACA’s essential health benefits would have to be offered, but there are some exceptions: pediatric dental and pediatric vision coverage would not be required, and insurers would be able to offer state-based plans without maternity coverage as long as they offer at least one state-based plan with maternity coverage (and at least one ACA-compliant plan with maternity coverage, since that’s a requirement for insurers to be able to participate in the state-based coverage program). Blue Cross of Idaho has proposed five state-based plans—one of them does not include maternity coverage, and none of them include pediatric dental or vision coverage.
- Out-of-pocket costs would still have to be capped, but notably, insurers would be able to apply separate out-of-pocket maximums for various services, such as prescriptions versus other medical care.
- State-based plans could impose benefit caps of $1 million or more, but would have to assist consumers in switching seamlessly to their ACA-compliant plans if the consumer were to reach the state-based plan’s benefit cap.
- Insurers could use a 5:1 age rating ratio for state-based plans, as opposed to the ACA’s 3:1 age rating ratio. Under the ACA, older applicants cannot be charged more than three times as much as younger applicants, but Idaho’s bulletin would allow insurers to offer state-based plans with premiums for older applicants that are up to five times as much as the premiums for younger applicants.
- Insurers would be required to place the state-based and ACA-compliant plans into a single risk pool, but Kaiser Family Foundation’s Larry Levitt notes that may be hard to enforce, especially given that the state-based plans would not participate in the ACA’s risk adjustment program.
Clearly, some of those provisions would align well with the concept of short-term plans, which is the option CMS encouraged Idaho to pursue in order to implement their proposal within the parameters of the ACA (since the ACA doesn’t apply to short-term plans).
In February, before CMS rejected Idaho’s proposal, Blue Cross of Idaho submitted five state-based plans to the Department of Insurance for review. The proposed BC of Idaho plans would have had $1 million annual benefit caps, would not have covered pediatric dental or vision, and one of the plans would not have included maternity coverage.
The plans would have had premiums that would have varied considerably depending on medical history: The Wall Street Journal reported that a healthy 45-year-old would pay about $194.67 a month in premiums, but a 45-year-old with a poorer medical history might be charged as much as $525.69/month in premiums (no premium subsidies would be available). For comparison, an ACA-compliant bronze plan from Blue Cross of Idaho would have pre-subsidy premiums of about $343.09/month for a 45-year-old, and those premiums don’t vary based on medical history (under the ACA, healthy people pay the same rates as sick people). For people who buy the ACA-compliant plans via Your Health Idaho, and who are eligible for premium subsidies, the subsidies offset a significant portion of the premium costs.
The state-based plans would no doubt have appealed to younger, healthier applicants, particularly those who don’t qualify for premium subsidies in the exchange (most exchange enrollees do qualify for premium subsidies, but everyone who buys individual market coverage off-exchange is paying full price, with no available subsidies). A healthy person would be drawn to the cheaper premiums, while a person with medical conditions will be better off keeping their ACA-compliant plan. This, in turn, would leave the ACA-compliant market with sicker, older enrollees, and higher premiums.
Under Idaho’s new rules, an insurer’s state-based and ACA-compliant risk pools would have to have been merged, but it’s unclear how well that provision would have been enforced. But since the state would have required insurers to offer ACA-compliant plans in order to offer state-based plans, and since premium subsidies via Your Health Idaho continue to be available (and grow to keep pace with premiums), the ACA-compliant market would have continued to exist alongside the “state-based” plans, albeit likely with fewer enrollees than it has to today. Assuming the people who would have remained in the ACA-compliant market are primarily those who are older, sicker, and/or receiving premium subsidies, the total federal outlay for premium subsidies would likely have grown, placing an additional burden on taxpayers.
Consumers who purchase state-based plans would ostensibly have been somewhat protected by the provision that requires insurers to transfer members to one of the insurer’s ACA-compliant plans if the member hits the state-based plan’s benefit cap. But rescission could have become a major issue in scenarios in which members do hit the benefit cap. Since these plans would have been medically underwritten, a person who ended up hitting the benefit cap (ie, a million dollars worth of claims during the year) could have been subject to significant post-claims underwriting.
Basically, the insurer would have been able to go back through the person’s medical records with a fine-toothed comb, checking to make sure that the person had been 100 percent honest when completing the initial medical underwriting questions. If the insurer found anything that the person hadn’t disclosed on the application, they would have potentially been able to rescind the policy for fraud or misrepresentation (this is still allowed under the ACA, but is much less of an issue on plans that don’t ask enrollees about their medical history). At that point, not only would the person retroactively lose their coverage, they also wouldn’t be eligible to switch to an ACA-compliant plan until the next open enrollment period.
It’s also unclear whether the out-of-pocket costs that the consumer had already paid would have been counted towards the ACA-compliant plan’s out-of-pocket exposure, or if the consumer would have been starting from zero mid-year in that scenario, assuming they were indeed able to transition to an ACA-compliant plan.
And it’s also important to note that consumers who select a state-based plan and then find out that it doesn’t cover as much as they thought it did would not have been able to switch to an ACA-compliant plan until open enrollment, unless they have a qualifying event. For example, the consumer might not notice that a particular state-based plan doesn’t cover maternity, especially since people have become accustomed to the concept of all plans covering maternity. In that case, she might only find out about the lack of maternity coverage if and when she becomes pregnant, and she would not be able to switch to an ACA-compliant plan until open enrollment.
This is an issue with short-term plans as well. A person who enrolls in a short-term plan and subsequently finds out that it doesn’t cover his or her medical needs cannot switch to an ACA-compliant plan until the next open enrollment. And since short-term plans are not considered minimum essential coverage, the termination of a short-term plan does not count as a qualifying event to trigger a special enrollment period for ACA-compliant plans.
Cameron and Otter expressed optimism in the face of the letter from CMS, noting that “we consider the letter an invitation from CMS to continue discussing the specifics of what can and cannot be included in state-based plans. We will consider all possible options and then continue discussions with CMS and HHS on how best to achieve our shared goals of reducing the costs of coverage and stabilizing our health insurance market.” As noted above, the state has largely shifted focus to enhanced short-term plans, but Cameron noted in late 2019 that Idaho “still may pursue the state-based plans.”
Assessment fee increased to 1.99% — still far lower than Healthcare.gov fee
Your Health Idaho was previously funded with a 1.5 percent assessment fee on all health insurance plans sold through the exchange (unlike many other states, the fee is not collected for plans sold outside the exchange). The fee increased to 1.99 percent in 2016, which is still considerably lower than the 3.5 percent assessment that Healthcare.gov collects in states that use the federally-facilitated marketplace (HealthCare.gov’s fee is dropping to 3 percent as of 2020).
The exchange does not receive any state funding, and had spent most of their initial federal start-up funding by 2016. The exchange must be self-sustaining going forward, which is why the assessment was increased.
A Leavitt Partners study found Your Health Idaho to be an excellent example of an exchange that is operating well on a much smaller-than-average budget. Your Health Idaho mostly uses in-house support for its systems, and only contracts with vendors for highly specialized services, like marketing. Many other state-run exchanges contract with vendors for much of their day-to-day operations, while Your Health Idaho staff handles most of the day-to-day operations of the exchange. This is part of the reason they’re able to operate at a lower cost than the rest of the state-run exchanges.
But at the same time, Your Health Idaho has limited itself to only essential functions. The exchange leaves plan oversight and rate review entirely to the Idaho Department of Insurance, and the Idaho Department of Health and Welfare does all of the subsidy and Medicaid eligibility determination for exchange enrollees. The exchange does not have to spend time or money being involved in these processes, or creating systems that would essentially duplicate the functionality of the DOI or DHW.
SHOP exchange – direct enrollment
As part of their cost-saving plan, Your Health Idaho opted not to build a SHOP (small business) exchange enrollment platform, and instead relies on direct enrollment through health insurance carriers (with agents and brokers providing enrollment assistance) when businesses want to enroll in SHOP plans.
Your Health Idaho has a paper application that small businesses can complete, with contact information that the exchange can use to get in touch with the business and help them move forward with the enrollment process. But in general, Your Health Idaho recommends that small businesses reach out to a broker or agent for assistance with SHOP enrollment.
This approach saves the exchange from having to administer and fund a SHOP platform, and in hindsight, is probably a wise decision—SHOP enrollments nationwide have been relatively lackluster, and Idaho’s decision means that the exchange is not having to fund and maintain a low-use enrollment platform.
History of Idaho’s marketplace development
Republican Gov. Butch Otter announced in December 2012 that Idaho would implement a state-run health insurance exchange, and HHS gave conditional approval of the state’s plan in early January 2013.
The state-run option was resisted by both the governor and many Republican legislators. Like those in other “red” states, Idaho leaders hoped the U.S. Supreme Court would find the Affordable Care Act (ACA) unconstitutional. However, after the Court upheld most elements of the ACA and a state task force in October 2012 strongly recommended a state-run exchange, Otter began leaning toward that option as preferable to a federally run exchange.
After Otter’s announcement in December 2012, legislators began considering legislation, and both chambers passed bills authorizing a state-run in exchange in the first quarter of 2013. However, that left scant time to set up the exchange. Idaho used the federal site for the first open enrollment period, but transitioned to its state-run platform in time for the 2015 open enrollment period.
In December 2015, a Leavitt Partners study called Your Health Idaho a “model for state based adoption [of an exchange]” and noted that the exchange has a budget well below average, a “lean organizational structure” and “strong financial controls.” The Leavitt study also indicates that Your Health Idaho benefited from the fact that they used Healthcare.gov during the first open enrollment, and waited until the second open enrollment period to debut their own enrollment platform; that allowed them to obtain lower-cost, better-developed software solutions, with the benefit of hindsight in terms of seeing what worked and what didn’t for the other state-run exchanges during year one.
Idaho is the only state that opted to build its own marketplace, but rejected Medicaid expansion. Medicaid is being expanded as of 2020, however, thanks to a voter-backed ballot initiative that passed in 2018.
Idaho health insurance exchange links
Your Health Idaho
State Exchange Profile: Idaho
The Henry J. Kaiser Family Foundation overview of Idaho’s progress toward creating a state health insurance exchange.
Idaho Department of Insurance
Answers questions about insurance bought on the individual market and insurance provided by an employer who only does business in Idaho.
(208) 334-4250 / toll-free (800) 721-3272
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.