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Otter: Idaho will not create new high-risk health insurance pool

Gov. C.L. “Butch” Otter says Idaho will not create a new high-risk insurance pool for people with preexisting health conditions, forcing the federal government to create one for the state.

Otter notified U.S. Secretary of Health and Human Services Kathleen Sebelius that Idaho would opt out of that provision of the new federal healthcare reform law, according to a news release.

As of May 3, 29 states plus the District of Columbia had said they would run pools at the state level, and 18 said they would leave the job to HHS, the Washington Post reports. Most of the states opting out are led by Republican governors.

The high-risk pools are aimed at helping uninsured people with pre-existing health conditions obtain coverage, but only until 2014. After that, insurers won’t be able to turn people away or charge higher premiums based on health status. The federal government has set aside $5 billion for the temporary pools.

Idaho already has a permanent high-risk pool that serves about 1,500 people, but it likely does not meet federal requirements.

According to the news release from Otter’s office, the Idaho Department of Insurance estimates that $24 million set aside for Idaho’s high-risk pool would provide only a month or two of coverage for the approximately 33,400 individuals who may qualify, even though it’s a four-year program.

“Put simply, Idaho cannot afford to subsidize a second high-risk pool program, especially during these difficult economic times,” Otter wrote in a letter to Sebelius.

Jenny Backus, HHS spokeswoman, said in a statement that the pools will provide access to insurance coverage to people who have been denied it.

“Whether states create these pools or the federal government creates them for states, the pools will be paid for by 100 percent federal dollars and most importantly – uninsured people around the country will soon have access to another affordable coverage option,” she said.

Otter also said the federally mandated pool would immediately provide coverage at standard rates for individuals with pre-existing conditions, even though individuals with pre-existing conditions who are enrolled in Idaho’s high-risk pool pay premiums 25 percent above standard rates. He said that pricing disparity would penalize Idahoans who have been sacrificing and doing the right thing by enrolling in Idaho’s high-risk pool, and as a result are ineligible to participate in the federal plan.

“Somebody will have to pay for that subsidy, and it’s going to be taxpayers,” he said. “We continue to question the constitutionality of this law and remain concerned about the cost imposed on the citizens of Idaho. We aren’t the only ones who have decided we just can’t afford this costly federal mandate.”

While Idaho will not be creating a high-risk insurance pool, the state will be required to research, plan and implement a permanent health insurance exchange intended to help Idahoans and small business owners obtain health coverage, said Department of Insurance Director Bill Deal.

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