- Idaho will allow payers to offer association health plans (AHPs) that are not required to meet all of the consumer protections or benefits criteria included in the Affordable Care Act.
Governor C.L. “Butch” Otter recently issued a state-level executive order that directs the Idaho Department of Insurance to support new health plan options that focus on affordability, even if they do not meet ACA thresholds. At a minimum, payers must offer health plans with certain requirements for benefits and financing set by the state.
In a press statement, the state Insurance Department said that payers will be allowed to sell health plans with relaxed criteria during 2018. The department added that payers must also offer at least one ACA-compliant health plan if they want to offer an AHP.
Otter also believes that the executive order can remedy unstable markets created by previous policies.
“Idahoans continue to be faced with significant health insurance rate increases which are harmful to our citizens and are unsustainable, and whereas these rate increases are driven by failures of the ACA, which have disrupted risk pools and bifurcated the insurance market,” Otter stated.
“The provisions and rules of the ACA, combined with rising costs, are driving the young and the healthy away from the insurance market, which leads to higher rates and has forced the Idaho insurance pool and market in to a ‘death spiral.’”
The Governor also directed the Insurance Department to seek a demonstration waiver from HHS if one is needed to support the executive order.
Blue Cross of Idaho is the first payer in the state to announce that it is selling five types of low-cost plans targeted to 110,000 Idahoans that currently do not have insurance.
The “Freedom Blue” plans allow consumers to choose benefits they want with premiums up to 50 percent lower than the rates of ACA compliant plans, Blue Cross of Idaho said.
Freedom Blue plans cover prescription drugs, doctor and specialists visits, emergency services, urgent care, hospitals, and physical therapy coverage. Freedom Blue plans use the same health networks as ACA-compliant health plans from Blue Cross of Idaho.
Members can still purchase the payer’s ACA plans through Your Health Idaho.
Charlene Maher, President and CEO of Blue Cross of Idaho said in a press release that the decision comes from both Governor Otter’s executive order and uncertainty surrounding the ACA’s future.
“As a not-for-profit health insurance company, Blue Cross of Idaho is committed to the health and wellness of our community. What Idahoans want is a stable, functional market,” Maher said.
“The current marketplace is not affordable for middle-class families. Our new state-based plans are a response to Governor Otter’s executive order, which begins to solve the issues that have kept middle-class Idahoans from buying health insurance. Our Freedom Blue plans bring more choices and lower prices to consumers.”
The implementation of association health plans nationwide could have short-term benefits for consumers but long-term consequences for insurance markets, according to health plan experts.
Both the Academy of Actuaries and the National Association of Insurance Commissioners (NAIC) cited strong disapproval of President Trump’s proposed expansion of AHPs because of potential deterioration in the individual market.
The Academy argued that AHPs can destabilize individual insurance risk pools as more individuals choose cheaper health plans with less comprehensive benefits. This could lead to rising premiums for individuals since AHPs don’t have the negotiating clout to pursue less expensive rates from providers.
AHPs could also alienate some consumers from affordable health plan markets, NAIC said, because many individuals would have to form a purchasing group to buy an AHP.
Additionally, BCBS, AHIP, and the American Heart Association penned a letter to state insurance departments to warn them of expanding AHP availability.
If the actions of Idaho payers and government officials grow into a national trend, it could create more uncertainty about the ACA’s future.