Health insurance policies sold via Idaho’s insurance exchange starting Jan. 1 will cost around $240 monthly, a figure based on packages submitted so far to the state Department of Insurance by insurers aiming to participate.
The figure, announced June 27 at an Idaho Insurance Exchange board meeting in Boise, is an average and doesn’t reflect actual costs for individual policyholders. That will depend on their financial circumstances, age and the benefits package they choose via the exchange, the federally mandated Internet portal through which individuals and businesses with fewer than 50 employees may purchase coverage.
But it offers a first glimpse of how President Barack Obama’s plan to provide health insurance coverage to more Americans will affect thousands of Idaho residents’ pocketbooks. Exchange board chairman Stephen Weeg predicted people will have a multitude of coverage choices. The deadline to begin enrolling participants is Oct. 1.
“The good news is, there are a number of plans,” Weeg said.
The state declined to release how many insurers have submitted plans or the number of plans reviewed to arrive at the $240 estimate. Specific details of policies won’t be released until sometime after July 31, the deadline for Idaho’s Department of Insurance to submit the policies to the federal government for review. But a few guidelines are known.
For instance, a family of four making $60,000 headed by a 40-year-old probably would be eligible for a government tax credit of $7,193 toward their annual premium of $12,130. That means the family would pay $4,937, about 8 percent of their income, or $410 monthly. Meanwhile, lower-income families would make lower payments, with help from the government’s sliding-scale subsidies provided for those who earn less than 400 percent of the poverty line.
House Minority Leader John Rusche, D-Lewiston, who is a member of the 19-person exchange board, said people’s ages will help set their monthly costs, too.
“There will be advantages for older people,” Rusche said, compared with individual coverage plans they can purchase now on the open market.
But premiums likely will be “slightly higher for younger, healthier people,” compared with open market plans, he said.
It’s unclear how many people eventually will use Idaho’s exchange, but the Department of Insurance estimates 190,000 residents will eligible. Some 102,000 people from this group now have no insurance.
About 88,000 already have insurance through individual plans, as opposed to coverage offered through Idaho companies or government. But as many as three-quarters of those in this group, roughly 66,000 people, may be eligible for the federal subsidies, making them more likely to switch to a policy sold via the exchange.
Given this uncertainty, the exchange board on June 27 voted to assess a 1.5 percent fee on each policy sold over Idaho’s exchange, in hopes of raising $10 million needed annually for exchange operations to be self-sufficient once federal assistance ends in 2016.
Board members left open the possibility of altering the fee after 2014, depending on how many enroll and the actual cost of running the exchange, to make sure there’s sufficient cash.
“The number we’re shooting for is really all over the place,” said Tom Shores, a Boise insurance agent and board member.
The main thing, exchange board members said June 27, was setting Idaho’s fee at a level less than the 3.5 percent-per-policy charge the federal government plans for 27 states that have opted to have the U.S. Department of Health and Human Services run an insurance exchange for them.
Idaho’s ability to operate an exchange more cheaply than the federal government was a key selling point for Gov. C.L. “Butch” Otter during the 2013 Legislature when he pushed reluctant lawmakers to adopt a state-based exchange, as opposed to a federal version he said would leave Idaho with too little say in its operations.
“There were over a dozen areas we were told we’d be able to maintain state control over, with a state exchange,” said Jon Hanian, Otter’s spokesman, on June 28. “That’s why the governor pursued this, as the least-worst option.”
Key developments in Idaho’s insurance exchange
The Idaho Insurance Exchange board’s 19 members and new executive director, Amy Dowd, have been moving quickly – some would say flying by the seat of their pants – to meet key federal deadlines: Oct. 1, when they’ll have to begin enrolling participants, and Jan. 1, when coverage is required to begin under President Obama’s Patient Protection and Affordable Care Act.
Here are a few key developments, as of this week:
- FEDERAL GRANTS: The federal government is shifting taxpayer money to Idaho to build its exchange, and Dowd said the arrival of a $20.3 million installment for initial work is imminent, according to her contacts at the U.S. Department of Health and Human Services.
- STAFFING BOOSTED: Dowd has boosted her staff to five people, including a marketing director, Jody Olson, whom the exchange lured away from a similar role at the Alberta Bair Theater in Billings, Mont.; and operations manager Alberto Gonzalez, a former bureau chief at the Idaho Department of Health and Welfare. Both start July 1.
- CONTRACTS: Exchange meetings have been attended by dozens of lobbyists, from private companies aiming to win lucrative pieces of building the Idaho’s insurance exchange. On June 27, exchange board members gave Dowd approval to begin negotiations with finalists vying for two contracts, one for outreach and education and the other for professional services.
- WHAT WILL THE WINNERS DO? An outreach contractor’s duties will include developing a statewide ad campaign to educate Idaho residents about the exchange; meanwhile, the winner of the professional services contract will assist Dowd in the exchange’s startup phase, including procuring additional federal grants and helping oversee development of the system enrollees will use to select coverage and determine their eligibility for federal, income-dependent subsidies.
- NO PERMANENT PHONES, EMAILS – YET: Dowd, named the exchange leader only in April, has been based out of a Boise law firm and has yet to get a permanent office phone or email. But on June 28, she said that’s planned for early July.
- REIGN OF CHAOS? The challenge, exchange board chairman Stephen Weeg, said, will be meeting all the federal deadlines with a small organization built from scratch since just April. “Two months ago, we were nothing,” Weeg said. “Ninety days from now, chaos will reign. … We have 90 days to mitigate the chaos.”