Highlights and updates
- CMS rejects Idaho’s plan to allow insurers to sell non-ACA-compliant plans
- What was Idaho proposing with their “state-based” plans?
- Blue Cross of Idaho wanted to offer 5 non-ACA-compliant plans by March
- More than 94,000 people enrolled in medical plans for 2018
- Bridgespan exited, 4 other insurers remaining in exchange
- SelectHealth reduced coverage area for 2018
- Exchange picked replacement plans for BridgeSpan & SelectHealth members
- Approved 2018 rate hikes averaged 26-31 percent, highest for silver plans
- 2018 rate hikes were based on assumption CSRs wouldn’t be funded
- Silver enrollees without subsidies could switch to “extended bronze” plans
- Premium subsidies larger in 2018, due to Idaho’s approach to CSR funding
Idaho exchange overview
Idaho has a state-run exchange, Your Health Idaho. They used HealthCare.gov’s enrollment platform during the first open enrollment period, but transitioned to their own enrollment platform in time for the second open enrollment period, and have been successfully using it ever since.
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. For 2018, BridgeSpan left the exchange in Idaho, but Your Health Idaho remains one of the more robust exchanges in the country in terms of carrier participation.
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 would allow 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.
CMS rejects Idaho’s plan to allow insurers to sell state-based plans that aren’t compliant with the ACA
In the year 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 there are regulatory changes that are still under review (for example, the proposal to expand access to association health plans, and the proposal to reverse the Obama Administration’s restriction on the duration of short-term plans).
States 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 outlining 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, calls Idaho’s bulletin “crazypants illegal” and health policy experts expressed varying degrees of skepticism over the chances that the state’s new regulations will 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 proposed that the federal definition of “short-term” should revert to what it was prior to 2017 — ie, a plan with a duration of less than one year, so a maximum of 364 days (Obama Administration regulations that took effect in 2017 limited short-term plans to no more than three months in duration). People who have coverage under short-term plans are subject to the ACA’s individual mandate penalty unless they’re otherwise exempt from it, but the penalty will no longer apply as of 2019, as the GOP tax bill repealed it after the end of 2018.
So essentially, CMS is upholding the letter of the law, but not the spirit of the law. The ACA was implemented in an effort to do away with the most egregious insurance practices that had long plagued the individual market, including benefit limits, plans with significant gaps in their coverage, and medical underwriting. Short-term plans use medical underwriting, do not have to cover the essential health benefits (maternity, mental health, prescription drugs are the benefits that are most often missing on short-term plans), and generally have fairly low benefit caps. And when healthy people have an option to purchase short-term plans that will cover them for nearly a full year (with no penalty, as of 2019), some of them will opt to leave the ACA-compliant individual market and move to the short-term market instead — sometimes without a full understanding of how the short-term plan will actually work if and when they need significant medical care. Crucially, the departure of healthy people from the ACA-compliant market will result in a sicker risk pool and higher premiums, driving up taxpayer-funded premium subsidies in the exchange.
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.”
What was Idaho proposing?
At Health Affairs, Katie Keith has an excellent overview of what Idaho’s bulletin would allow and the implications of what would happen if insurers were to start 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 give 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 has 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, and CMS is anticipating their new regulations that will significantly lengthen the allowable duration for short-term plans).
Insurers seemed to be interested in Idaho’s state-based plans, so it’s likely that we could see a proliferation of longer-duration short-term plans in Idaho once the federal regulations are finalized. In February, Blue Cross of Idaho submitted five state-based plans to the Department of Insurance for review. The insurer hoped to have the plans available for purchase by March, with coverage effective in April. 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 vary 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 be 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 will continue to be available (and would 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 grow, 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 will be an issue with short-term plans aswell. A person who enrolls in a short-term plan and subsequently finds out that it doesn’t cover his or her medical needs would not be able to 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.
Your Health Idaho reported that 101,793 people signed up for private plans through the exchange for 2018, although Charles Gaba notes that the total includes stand-alone dental plans: 94,507 people signed up for health insurance. That’s a little lower than enrollment for 2017 (when total enrollments, including stand-alone dental, reached 105,977), but open enrollment for 2018 coverage was half as long, running for just over six weeks instead of three months.
Open enrollment for 2018 coverage in Idaho ran from November 1, 2017 to December 15, 2017, but plans were available to preview starting on October 1. Open enrollment for 2018 was originally scheduled to run for three months (November through January, the same schedule that was used for the past two years), and was slated to switch to the shorter November 1 to December 15 window starting in the fall of 2018.
But the Trump Administration moved up that time frame in April 2017, with market stabilization regulations that shortened the open enrollment period for 2018 coverage, setting the window to November 1, 2017 through December 15, 2017.
The new schedule applied nationwide, but state-run exchanges that use their own enrollment platform (ie, not HealthCare.gov) had the flexibility to extend open enrollment, and ten of the 12 fully state-run exchanges did so. But Your Health Idaho did not (Vermont’s exchange is the only other fully state-run exchange that did not extend open enrollment for 2018 coverage).
This is the first time that open enrollment ended before the start of the new year, so it was essential for enrollees to pay attention to the communications they get from their insurers and from Your Health Idaho in the fall of open enrollment, as there is no longer an opportunity to enroll or make coverage changes after the start of the year (or even in the final two weeks of 2017), unless you have a qualifying event.
BridgeSpan withdrew for 2018; four other insurers remaining in exchange, but SelectHealth’s coverage area is smaller
Compared with the rest of the country, Idaho is among the states with the most robust exchanges in terms of insurer participation for 2018. Most counties in the state have four insurers offering plans in the exchange, and 12 counties have three. There are only a handful of other states where most counties have four or more insurers offering exchange plans for 2018.
Insurers in Idaho had to submit forms for 2018 plans by May 15 2017, but they had until June 2 to file rates. Mountain Health CO-OP, SelectHealth, PacificSource and Blue Cross of Idaho all filed forms to continue to offer Your Health Idaho plans in 2018, although SelectHealth reduced their coverage area for 2018.
There were five insurers that offered plans in Your Health Idaho in 2017, but BridgeSpan confirmed by phone in May 2017 that they would only offer off-exchange plans in 2018. The insurer noted at that point that the impending switch to only offering off-exchange plans was a cost-control measure, but is also a result of uncertainty and instability for the exchanges.
However, by late July, when the Idaho Department of Insurance publicized the 2018 rate filings, BridgeSpan’s filing had been withdrawn altogether. Your Health Idaho enrollees — as well as off-exchange enrollees — who had BridgeSpan coverage in 2017 needed to switch to a different plan during open enrollment (November 1, 2017, through December 15, 2017), as existing BridgeSpan plans terminated on December 31, 2017.
Your Health Idaho reported in September 2017 that BridgeSpan members who did not return to the exchange to pick a new plan would be automatically enrolled in a plan from a different insurer in order to prevent a lapse in coverage as of January. HealthCare.gov started using a similar mapping protocol during the open enrollment for 2017 coverage, but BridgeSpan’s exit represented the first time that Your Health Idaho has had an insurer pull out of the exchange, so it was the first time that such a protocol was necessary for Idaho
On-exchange BridgeSpan and some SelectHealth members mapped to new plans, SEP only applies off-exchange
In the federally-run exchange (HealthCare.gov), consumers whose insurers exited the exchange were mapped to comparable plans (if they didn’t pick their own replacement plan by December 15) but they’re also eligible for a special enrollment period through March 1, 2018, when they can pick their own new plan.
But 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 is 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 is 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).
However, since BridgeSpan also exited the individual market off-exchange, and since Select Health also exited the off-exchange market in eastern Idaho, there is a special enrollment period for people whose off-exchange BridgeSpan and Select Health plans ended on December 31, since there was no entity available to auto-re-enroll those enrollees into new plans. People with terminated off-exchange BridgeSpan and Select Health plans had until December 31 to pick a new plan with a January 1 effective date (since the rules for effective dates are different during a special enrollment period triggered by loss of coverage). They will have until March 1, 2018 to select a new plan, but if they select it after December 31, they will be uninsured on January 1 and will have a gap in coverage before their new plan takes effect.
2018 rate hikes steep, based on assumption that Trump would cut off CSR funding
Your Health Idaho reported on September 15 that rates would be finalized by the Idaho Department of Insurance the following week, and that consumers will be able to start window-shopping for 2018 health plans on October 1, a month ahead of the start of open enrollment. The final rates were announced on September 29, and window shopping did become available on October 1.
The Idaho Department of Insurance does not have the authority to prevent health insurers from implementing rates that are deemed unjustified. But they use a review and negotiation process during which they analyze the rates that have been filed for the coming year and work with insurers to ensure that rate changes are actuarially justified. For 2018, the rate changes for some insurers are significantly different from the initially proposed rates.
For the four insurers that will continue to offer plans in Your Health Idaho in 2018, the following average rate increases were approved:
- Blue Cross of Idaho: 26 percent (average proposed rate increase was 28 percent)
- Mountain Health CO-OP (an ACA-created CO-OP): 31 percent (the average proposed rate increase was 25 percent in Idaho; in neighboring Montana, the same CO-OP, which goes by Montana Health CO-OP in that state, proposed just a 4 percent average increase).
- SelectHealth: 28 percent (the average proposed rate increase was 48 percent; SelectHealth is exiting eight counties in eastern Idaho at the end of 2017, and their coverage will be mostly confined to the southwest and central portions of Idaho in 2018).
- PacificSource: 28 percent (the average proposed rate increase was 44 percent)
Regence Blue Shield of Idaho only offers off-exchange plans in Idaho. For 2018, they proposed a 51 percent average increase — which was higher than any of the on-exchange insurers — but the final approved rate increase for Regence was 29 percent.
It’s noteworthy that the average approved rate increases for silver plans in Idaho (for on-exchange insurers) are much higher than the overall averages. The overall statewide average rate increase is 28 percent, while the overall statewide average rate increase for silver plans is 44 percent (the average rate increase for bronze and gold plans is 11 percent and 9 percent, respectively). This discrepancy was due to an assumption that the Trump Administration would not continue to fund cost-sharing reductions (CSR).
Idaho Department of Insurance Director, Dean Cameron, had noted that if Congress were to either appropriate funding for cost-sharing reductions or end the cost-sharing reductions program altogether, it would “reduce the proposed increase by at least 20% on the Silver plans.” But ultimately, the Trump Administration cut off CSR funding in mid-October, two weeks after the rate were approved in Idaho.
Idaho’s approach to the CSR funding uncertainty
Unless Congress repeals the cost-sharing program altogether, insurers are required to continue to provide cost-sharing reduction plans to low-income enrollees. But since the federal funding for this program has been eliminated insurers have no choice but to exit the market or drastically increase premiums. In some states, insurers filed rates based on the assumption that cost-sharing reduction funding would continue, although many of those insurers were scrambling to revise their rates in October, after CSR funding was eliminated. In Idaho, however, the filed rates were based on the assumption that cost-sharing reduction funding would be eliminated, so they were appropriate once that happened.
The Idaho Department of Insurance clarified that “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.”
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 (that’s the approach that California has taken). 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 is 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).
What insurers did instead to create new “extended 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 are offering bronze plans with 65 percent actuarial value for 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 percent, respectively.
For silver plan enrollees in the exchange who are receiving premium subsidies, the additional CSR-related premium load on silver plans will be all or mostly covered by commensurately larger premiums subsidies. And for enrollees in other metal levels who are receiving premium subsidies, net premiums will become 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 will increase, but the CSR load won’t be 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 will apply in 2018. These enrollees can keep their silver plans if they like, but many will find that the new “extended bronze” plans, on or off-exchange, will be a better — and much less expensive — fit.
It’s important to understand that if cost-sharing reduction plans were to be eliminated altogether, health care would become largely unaffordable for many low-income exchange enrollees, as their out-of-pocket costs would climb to levels that would be unrealistic when compared with their income. Although the silver-plan rates in Idaho for 2018 are likely to have sharply higher premiums as a result of the uncertainty surrounding federal funding for CSRs, most consumers won’t bear the brunt of the higher prices. Instead, the federal government will end up paying most of the additional premiums, thanks to the additional charge being added to silver plans and thus resulting in larger premium subsidies.
Premium subsidies larger in 2018 to offset the cost of CSR being added to silver plan rates
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) will result in larger premium subsidies, as the subsidies will have to grow to keep pace with the increasing silver plan premiums. Bronze and gold plans will become an even better value for people who receive subsidies, as the larger subsidies will be applicable to those plans too, despite the fact that the additional premiums to account for the lack of CSR funding will only be added to silver plans.
The subsidies are actually just tax credits, which means the Trump Administration will be 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 will end up bearing the brunt of the rate increases for 2018 will 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 will bear the brunt of the additional premiums to account for the uncertainty surrounding federal funding for CSRs are only those who purchase silver plans (on-exchange, or the same qualified health plan sold off-exchange) and don’t receive premium subsidies.
Director Cameron has made it clear in past statements that he supports GOP efforts to repeal and replace the ACA, and the Department’s statement about the rate filings reiterates some of that. Cameron notes that it would be acceptable for Congress to fully terminate the CSR program as an alternative to funding it, since leaving it intact but not funding it will result in spiking premiums. This is a valid point in terms of premiums, but it fails to account for the fact that out-of-pocket costs would become unaffordable for low-income enrollees if CSR plans were to disappear.
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’s statement also calls 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.
Your Health Idaho was the first exchange to open up window shopping for 2017 plans, doing so on October 1, 2016 — a full month ahead of the November 1 start of open enrollment. A total of 225 health and dental plans are available through the exchange for 2017.
On December 16, 2016 Your Health Idaho announced that over 98,000 people had enrolled in plans for 2017, including renewals and new enrollees. The exchange noted that this was the highest their enrollment had ever been at the mid-way point of an open enrollment period.
By January 18, 2017, Your Health Idaho reported that “more than 100,000” people had enrolled. And on February 8, they announced that 105,977 people had signed up for private plans during the 2017 open enrollment period.
For perspective, 102,353 by the end of the previous open enrollment period. So enrollment climbed by 3.5 percent in Idaho for 2017. Enrollment also grew in other state-based exchanges, including Colorado and Washington. But HealthCare.gov enrollment declined for 2017, likely due to the uncertainty surrounding the ACA under President Trump, and the Trump Administration’s move to cut back on advertising and outreach in the final week of open enrollment.
By February 2017, effectuated enrollment stood at 84,067 in Idaho’s exchange.
Your Health Idaho and the Trump Administration
Although there’s considerable uncertainty about the future of the ACA, nothing has changed for the time being.
HHS reported that 109,000 people in Idaho had gained coverage as a result of the ACA between 2010 and 2015. That number has continued to grow since 2015, as exchange enrollment grew in 2016 and again in 2017. But the Trump Administration and Republican lawmakers spent much of 2017 pushing to repeal and replace the ACA. House Republicans passed the American Health Care Act (AHCA) on May 4 (both of Idaho’s representatives voted for the bill). The Senate failed to pass their version of the legislation in July, and again in September, when they failed to generate enough support for ACA repeal to pass the Graham-Cassidy-Heller-Johnson bill.
Idaho has not expanded Medicaid under the ACA, so people with income below the poverty level are already in dire straits in Idaho (with essentially no coverage options available), and their situation is unlikely to change if the ACA is repealed or changed.
But 88 percent of Idaho exchange enrollees are receiving premium subsidies, and 66 percent are receiving cost-sharing subsidies. Premium subsidies make coverage more affordable, and cost-sharing subsidies reduce out-of-pocket costs for people with modest incomes.
The Trump Administration cut off funding for cost-sharing subsidies in October 2017, but nothing has changed about eligibility for those benefits. Enrollees who pick silver plans in the exchange and whose income is between 100 and 250 percent of the poverty level are eligible for cost-sharing subsidies. But instead of receiving federal reimbursement for the cost of this benefit, insurers have added the cost of cost-sharing subsidies to silver plan premiums. That, in turn, results in larger premium subsidies. As a result, some enrollees will find that their coverage is more affordable in 2018 than it was in prior years.
2017 rates and carriers:
The average individual market premium increased by 24 percent in Idaho for 2017, but that doesn’t take subsidies into account. Nearly 88 percent of Your Health Idaho’s enrollees were receiving subsidies as of March 2016, and subsidies offset much of the rate increase as long as enrollees are flexible about the possible need to switch plans in order to take advantage of the most robust subsidies.
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.
Idaho’s six individual market carriers (five of which offer plans in the exchange) proposed an average rate increase of 28 percent for 2017. But the carriers all eventually settled on rates that were different from what they had proposed (some higher, some lower), and the end result is an average rate increase of 24 percent:
- Blue Cross of Idaho: 19 percent
- BridgeSpan: 23 percent (BridgeSpan is a sister company to Regence Blue Shield of Idaho; BridgeSpan was established specifically to offer policies through Your Health Idaho, while Regence provides off-exchange coverage and had an average rate increase of 25 percent in 2017).
- Mountain Health CO-OP (an ACA-created CO-OP): 29 percent
- SelectHealth: 29 percent
- PacificSource: 15 percent
Average rates in the small group market will only increase by 4 percent for 2017. Nationwide, the small group market is currently much less volatile than the individual market.
Enrollment 5% higher in 2016
102,353 people enrolled in private plans through for 2016 Your Health Idaho by mid-February (up from 101,073 as of February 1; open enrollment ended on January 31, 2016, but enrollments can continue to be submitted if enrollees have qualifying events). The exchange reported that their per-capita enrollment was second in the nation for 2016 – trailing only Florida – after being fourth in the nation in 2015. By March, effectuated enrollments (ie, premiums paid) through Your Health Idaho stood at 95,522. At the end of March, effectuated enrollment was 94,270.
For perspective, in-force enrollment in mid-December 2015 stood at about 86,000 people, and during the 2015 open enrollment period, 97,079 people selected coverage in private plans (enrollment is expected to decline somewhat throughout the year; attrition is a normal part of the individual health insurance market, and relatively few people are able to enroll outside of open enrollment).
As of early 2016, Idaho had a surplus of nearly $29 million in its Catastrophic Health Care fund, thanks to a declining uninsured rate in Idaho, and more people obtaining coverage through Your Health Idaho. The CAT fund is state money that’s used to cover a portion of catastrophic medical bills for uninsured residents (residents whose medical bills are paid end up with liens on their homes and other assets, but most of the money is never recovered). The CAT fund has $29 million in unspent funds, which will be transferred to the state’s general fund.
The CAT fund will continue to operate, however, and still has cash left over after the transfer to the general fund. Idaho has not yet expanded Medicaid, so there are still tens of thousands of residents without any access to health insurance. Senator Dan Schmidt, D-Moscow, recently announced his resignation from the board of the Catastrophic Health Care fund, stating “I cannot continue to serve on a program board I fundamentally believe should not exist.” Schmidt’s position is that if Idaho were to expand Medicaid, the CAT fund would no longer be needed, and that the state should focus on making sure that low-income individuals have health insurance rather than sorting through CAT fund applications for help.
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.
The exchange does not receive any state funding. They received $104 million in federal funds for 2014 and 2015, but most of that money has already been spent, although the exchange notes that they have about $6 million in cash reserves. The exchange must be self-sustaining going forward, which is why the assessment has been increased. The board has approved a $9.7 million operational budget for 2016, plus a $15 million project budget. For the 2017 fiscal year, the operational budget is expected to drop to about $9 million.
As noted above, a recent 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.
Your Health Idaho – a “model” exchange
Your Health Idaho is a state-run exchange, and is offering a total of 211 health and dental plans for 2016 (adult dental is offered through Your Health Idaho for the first time in 2016; previously the exchange only sold pediatric dental).
Your Health Idaho used Healthcare.gov’s enrollment platform in 2014, but switched to being a fully state-run exchange in time for the 2015 open enrollment period. Your Health Idaho’s Executive Director Pat Kelly has said that the exchange worked hard to make sure that the 2016 open enrollment period would be even better than the prior year, noting that “we’ve worked tirelessly over the last 9 months to improve our technology, make it easier for consumers, and also for those agents and brokers.”
Your Health Idaho debuted anonymous browsing for 2016 plans on their website starting October 1 – a full month ahead of the start of open enrollment. California had already enabled browsing, but Idaho and Maryland became the second and third states to do so in advance of the 2016 open enrollment period. Your Health Idaho didn’t previously have an anonymous browsing tool at all, so this was a big improvement for the exchange.
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.
2016 rates and carriers
Of the five carriers selling individual health plans through Your Health Idaho, three proposed double-digit rate hikes for 2016: Blue Cross Blue Shield of Idaho, Mountain Health CO-OP, and SelectHealth. Rates were finalized by regulators at the end of August, and ACAsignups’ Charles Gaba has filled in some additional details.
- Blue Cross of Idaho = proposed average rate hike of 24.28 percent (average approved rate increase is 23 percent).
- BridgeSpan = proposed average rate hike of 6.3 percent (average approved rate increase is 7 percent).
- Montana Health CO-OP (Mountain Health CO-OP in Idaho; an ACA-created CO-OP) = proposed average rate hikes of 25.75 percent for LINK plans and 22.88 percent for Access Care; overall proposed average = 25.4 percent. (approved average rate increase is 26 percent).
- SelectHealth = 14.68 percent (approved average rate increase is 15 percent)
- PacificSource = In 2015, PacificSource had rate increases in excess of 30 percent for their individual market exchange plans in Idaho. But for 2016, regulators approved an 8 percent decrease.
Two additional carriers offered individual coverage outside the exchange in Idaho in 2015: Regence Blue Shield and Time. Regence had an average rate increase of 10 percent for 2016, but Time exited the insurance market nationwide and is no longer offering coverage anywhere for 2016.
Blue Cross of Idaho does not have to publicly release its CEO and board members’ compensation, under Idaho law. The other four carriers in the exchange are based in neighboring states, and their CEO and board compensation is public information.
Your Health Idaho is also offering dental coverage from five carriers: Dentegra (new for 2016), BEST Life and Health Insurance Company, Delta Dental of Idaho, The Guardian Life Insurance Company of America, and Willamette Dental.
There are not any Platinum plans available in the Idaho exchange for 2016. Only about 2 percent of Idaho exchange enrollees selected platinum plans in 2015, and the carriers opted not to offer those plans in 2016, as they aren’t required by the ACA and clearly were not a popular choice among enrollees.
For the most part, approved rates in Idaho are virtually the same as the proposed rates, although the Idaho Department of Insurance noted that they were able to work with carriers to reduce the overall rate hikes on some plans, particularly at the Silver and Bronze level. But the DOI explained that “carriers propose rates based on claims experience, premiums, network provider agreements, administrative and other costs. Based on these criteria, the Department could not find the carrier rate proposals to be unreasonable.” Hence, rates were mostly finalized as-proposed.
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 any premium subsidies are applied. If that 40-year-old applicant earns $30,000 in both 2015 and 2016, and was willing to switch plans in order to still have the benchmark plan in 2016 (the second-lowest-cost Silver plan isn’t necessarily offered by the same carrier that offered it the year before), the after subsidy premium will actually be slightly lower in 2016 than it was in 2015, because the subsidy will increase to offset the higher premiums (the poverty level is also slightly higher, so if enrollees have the same income they had in 2015, their income is now a slightly lower percentage of the poverty level, making them eligible for a slightly higher subsidy).
In 2015, nearly 82 percent of Your Health Idaho enrollees were receiving premium subsidies that averaged $227/month. Since the cost of the benchmark plans across Idaho increased for 2016, the average subsidy also increased, and more enrollees are eligible for subsidies in 2016.
CO-OP still solvent
By the end of 2015, 12 of the 23 CO-OPs created by the ACA had closed. But Montana Health CO-OP (which operates as Mountain Health CO-OP in Idaho) appeared to be on somewhat solid ground. CEO Jerry Dworak noted in October 2015 that the CO-OP didn’t expand too quickly, and maintained substantial reserves; they were not relying as heavily on risk corridor payments to shore up their financial position (as Charles Gaba has noted, the CEO’s proclamation that they’re doing well doesn’t necessarily mean they don’t have financial troubles – but for now, they managed to avoid being shut down by regulators, which is more than can be said for almost half of the CO-OPs).
The CO-OP was due to receive $6 million in risk corridor payments, and ultimately only received 12.6 percent of that amount (just like all of the other carriers that were owed risk corridor payments). But unlike nine other CO-OPs that were doomed by the risk corridor shortfall and shut down by the end of 2015, Montana Health/Mountain Health CO-OP was still viable heading into 2016. Their average rates increased by 26 percent, but that was very comparable to the average rate hike for BCBS of Idaho.
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. There are six carriers (including Dental carriers) that offer SHOP-certified plans in Idaho:
- BEST Life and Health Insurance Company
- Blue Cross of Idaho
- Mountain Health CO-OP
- PacificSource Health Plans
- SelectHealth, Inc.
- Willamette Dental of Idaho, Inc
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.
2015 enrollment data
During the second open enrollment period, Idaho ranked fourth in the nation in terms of per-capita enrollment in the exchange. Only three states (Maine, Georgia, and Florida) had higher per-capita exchange enrollment, and they all use Healthcare.gov. Idaho’s per-capita enrollment was the highest of the state-run exchanges.
Idahoans had until Feb. 15 to complete an application on Your Health Idaho and until Feb. 21 to finalize their plan selections. As of Feb. 21, the exchange had enrolled 97,079 people in private plans for 2015. But some of them didn’t pay their initial premiums (meaning their coverage was never effectuated), and some people cancelled their coverage early in the year. By the end of March, 84,987 people had in-force private plan coverage through Your Health Idaho. 81.3 percent were receiving premium subsidies, and 62.3 percent were receiving cost-sharing subsidies (only available on silver plans for enrollees with incomes up to 250 percent of the poverty level).
By mid-April, effectuated enrollments had climbed slightly to 85,128 people, despite the fact that Idaho was one of only three states in the US that didn’t offer a special enrollment period (SEP) to accommodate consumers who didn’t know – until they filed their taxes – that there was a penalty for being uninsured. And by the end of June, effectuated enrollment stood at 85,981. Nationwide, there was a dip in effectuated enrollment numbers from March to June, but Idaho added almost a thousand effectuated enrollments during that time.
An additional 314,398 exchange enrollees qualified for Medicaid between Nov. 15 and Feb. 22. Medicaid enrollment continues year-round, but it tends to increase during open enrollment due to outreach activities.
No impact from King v. Burwell
Because Idaho switched to being a fully state-run marketplace in 2015, subsidies were not in danger of being eliminated in the King v. Burwell lawsuit. Ultimately, the Supreme Court ruled that subsidies are legal in every state, even those that rely on Healthcare.gov. Although the verdict didn’t impact Idaho one way or the other, the state’s Congressional delegation — all Republicans — were largely unimpressed by the Court’s decision. But Gov. Butch Otter, also a Republican, praised the state’s efforts to establish and run an exchange, thereby insulating the state’s residents from any potential fallout from the King case.
State-run marketplace launch was ‘flawless’
Your Health Idaho transitioned to its own platform for the ACA’s second open enrollment period, and the launch was “absolutely flawless” according to the exchange’s executive director.
Idaho relied on HealthCare.gov, the federal exchange, for enrollment functions during the first open enrollment period. To get ready for 2015, Idaho transitioned to its own technology. The move paid off as 2015 open enrollment on Your Health Idaho was very successful.
Your Health Idaho touts a low assessment fee as one of biggest consumer benefits to running its own exchange. For both 2014 and 2015 policies, Your Health Idaho charged an assessment fee of 1.5 percent of premium cost. On the federal marketplace, the fee is 3.5 percent. Idaho’s assessment increased slightly in 2016, to 1.99 percent, but is still considerably lower than Healthcare.gov.
New insurer joined Your Health Idaho in 2015
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 are offering coverage in 2016.
2014 enrollment recap
More than 76,000 Idahoans signed up for health insurance during the first enrollment period. That’s 36,000 more than the target set by the federal government, and in a state of only 1.7 million people, the per-capita enrollment ranks Idaho third in the nation for plans purchased during the first open enrollment period.
Among Idaho residents selecting a QHP, 92 percent qualified for financial assistance, compared to 85 percent nationally. Only Mississippi and Wyoming had higher rates of individuals eligible for assistance. A report released in June by the U.S. Department of Health and Human Services showed the average monthly premium, after tax credits, for Idaho consumers was $68. Fifty percent of those Idaho enrollees who qualified for subsidies pay $50 or less per month after subsidies.
During the 2014 open enrollment period, 15 percent of Idaho residents selected a bronze plan (20 percent nationally), 72 percent selected a silver plan (65 percent nationally), 10 percent selected a gold plan (9 percent nationally), 3 percent selected a platinum plan (5 percent nationally) and 1 percent selected a catastrophic plan (2 percent nationally). Twenty-seven percent of Idaho enrollees were between the ages of 18 and 34.
Agents and brokers: key to success
Your Health Idaho created a strong partnership with agents and brokers in the state, and 50 percent of the exchange’s 2014 enrollments were facilitated by agents and brokers. Your Health Idaho refers to agents and brokers as the “backbone” of the exchange, and credits the partnership with them as the main factor that drove enrollment in 2014.
70 percent of enrollments in the Idaho exchange in 2015 were completed with the assistance of brokers, which is far higher than most other states and reflects Your Health Idaho’s commitment to partnering with brokers.
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.
Idaho is the only state that opted to build its own marketplace, but decided against expanding eligibility for its Medicaid program. According to the Kaiser Family Foundation, the decision means about 30,000 (possibly as many as 78,000) Idahoans fall into the coverage gap — meaning they don’t qualify for Medicaid or for subsidies to help them purchase private coverage.
The Medicaid Redesign Group, appointed by Otter, has repeatedly supported Medicaid expansion. The workgroup has recommended the Healthy Idaho Plan, which would extend Medicaid eligibility to adults up to 100 percent of the federal poverty level (FPL) and provide subsidies to help those between 100 and 138 percent of FPL to purchase private coverage through Your Health Idaho. The workgroup also supports a pilot program to use money from the state’s catastrophic care fund to purchase health insurance for people in the Medicaid gap.
In his 2015 State of the State address, Otter asked state legislators to consider the recommendations from the Medicaid Redesign Group. Republican leaders said they were open to discussing the recommendations, but stopped far short of endorsing expansion. The Idaho Medical Association has asked lawmakers to support the Healthy Idaho Plan.
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.