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Idaho officials negotiating on ‘state-based’ insurance plan

Idaho officials say they may add more requirements from former President Barack Obama’s health care law to their proposal to let health insurance companies sell so-called state-based policies that skirt some “Obamacare” rules.

Idaho Department of Insurance Director Dean Cameron says he and other officials have been negotiating with the U.S. Department of Health and Human Services in an effort to come up with a modified approach to the state-based plans that will pass federal muster while still ditching some Affordable Care Act provisions.

“You will probably see us acquiescing on annual limits and essential health benefits,” Cameron said. Potential changes to the state’s proposal include requiring maternity coverage, he said.

Meanwhile, Idaho officials are proposing a slightly different approach to determining premium costs and some other regulations, Cameron said, though the details are still under discussion.

Cameron says the state-based plans are needed to save Idaho’s insurance exchange as premiums continue to rise and some healthy residents opt to go uninsured.

Idaho Gov. C.L. “Butch” Otter and Lt. Gov. Brad Little announced in January that they would allow insurance companies to sell cheaper policies that don’t fully comply with “Obamacare,” despite not yet having any federal approval for what critics called a legally dubious plan. Idaho was believed to be the first state to do so. Several weeks later, however, Seema Verma with the Centers for Medicare and Medicaid Services sent the state a letter warning that the proposal was illegal under the Affordable Care Act, and reminding Idaho that officials that her agency had a duty to uphold the health care law.

Still, Verma indicated her agency was sympathetic to Idaho officials’ concerns, and the state has been deep in negotiations over the past few weeks. The agency also extended the 30-day deadline that Idaho had to respond, with a new deadline set for May 5.

It wasn’t immediately clear if that deadline would be extended again, though emails and other documents obtained by The Associated Press through a public records request indicated both entities were working toward a solution.

Randy Pate, director of insurance oversight with the federal agency, noted in an email to Cameron last month that Idaho and the Centers for Medicare and Medicaid Services “are engaged in productive conversations regarding the sale of State-based plans.”

Pate also asked Cameron to keep communications between the two confidential to maintain the integrity of the process. Some of the records obtained by the AP were redacted under federal Freedom of Information Act rules exempting certain “deliberative materials” from release.

“They’ve pushed us and challenged us in some ways, and we’ve pushed back and challenged in some ways, and it’s been a helpful discussion,” Cameron said.

Idaho, feds wading through details of insurance proposal

The details

Idaho officials are hoping to allow insurers to sell plans that don’t comply with former President Barack Obama’s health care law. The move is needed to save Idaho’s insurance exchange as premiums continue to rise and some healthy residents opt to go uninsured, Idaho Department of Insurance Director Dean Cameron says. But the federal government hasn’t signed off, with agency leaders noting they are bound by law to enforce the Obama-era health insurance rules. Still, Cameron and other state leaders are negotiating with federal officials in hopes of coming up with a plan they can sell. Here, a look at what might be some of the sticking points:


Risk pools divide health insurance policyholders into groups mainly based on health status and how much money they are expected to cost the insurance company. Generally speaking, there must be enough healthy — and thus, inexpensive — customers in a risk pool to offset the sicker, more expensive customers. Under the rules of the Affordable Care Act, the policies in Idaho’s health insurance exchange all had the same risk pool, and all were given the same coverage. Idaho’s proposal would allow health insurance companies to sell policies that don’t follow “Obamacare” rules. But the people who buy the cheaper, non-compliant policies would still be kept in the same risk pool as those who buy more the expensive “Obamacare” policies. Cameron says that’s because the cheaper policies are intended to attract the healthier people needed to offset the sicker individuals with “Obamacare” policies.


These programs are designed to level the playing field for insurance companies, so companies with sicker customers can remain competitive with companies that have healthier customers. Under the programs, the state or federal government calculates the overall financial risk a company’s risk pool represents, and those companies with lower risk pay a fee to the companies with higher risks to offset the costs. Idaho’s proposal doesn’t currently include a risk adjustment program, but Cameron says it’s something the state may have to consider.


A key component of the Affordable Care Act is the requirement that every policy cover 10 “essential health benefits,” including things like maternity and newborn care, mental health and substance abuse treatment, emergency services, prescription drugs and outpatient services. Idaho’s initial plan would have allowed health insurers to skip some of those benefits for certain policies, including things like maternity care. Cameron now says the state will likely concede on that point, however, requiring that all plans cover all 10 essential health benefits.


Obama’s health care law prohibits insurance companies from placing annual caps on the costs a patient can insure. Idaho’s plan initially would have allowed caps of $1 million a year per individual. Cameron says the annual cap option will now likely be lifted from Idaho’s proposal.

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