How one state that hates Obamacare still makes it work

No deeply conservative state has done more than Idaho to make Obamacare work. But no other state is doing more to untangle itself from the health care law.

On the eve of the 2019 open enrollment season, at least three insurers are selling plans in every corner of the sprawling state. It’s got one of the best enrollment rates in the country. The outgoing Republican governor is supporting a ballot initiative to expand Medicaid, which could improve the health of the Obamacare market.

But Idaho officials are backing a radical plan to offer skimpier coverage options, sounding the alarm over their insurance marketplace. They estimate enrollment in the individual market has shrunk by about a third in three years as premiums skyrocketed. The state’s largest insurer, Blue Cross of Idaho, doubled rates in recent years, though they’re rising more slowly in 2019 plans.

“The affordability issue trumps everything,” said Lt. Gov. Brad Little, a Republican who is the front-runner in next Tuesday’s gubernatorial election. “We’ve lost so many young and healthy people out of the [insurance risk] pool that it hurts [everyone] else out there.”

The Obamacare sign-up season starting Thursday is the second one overseen by the Trump administration — and the first since the GOP Congress scrapped the controversial individual mandate once thought to be the law’s linchpin. Yet the insurance marketplaces appear to have stabilized in Idaho and many states after years of turbulence. With fresh encouragement from the Trump administration, however, red states are eyeing yet another batch of opportunities for scaling back Obamacare.

“It’s maybe ironic that the [Affordable Care Act] market seems as stable as ever at the same time that there’s enormous tumult swarming around it,” said Larry Levitt, senior vice president for health reform at the Kaiser Family Foundation.

The Trump administration is trying to take credit for the improving insurance marketplaces at the very same time that it’s chipping away at the law’s underpinnings. Those measures are expected to disproportionately hurt poor and vulnerable patients who have benefited most from the Affordable Care Act. Many of the changes, such as the wider availability of skimpier non-Obamacare plans, will take time to unfold. The impact won’t be apparent this week when sign-ups start just days before midterm elections defined in part by backlash to the GOP’s unpopular Obamacare repeal efforts.

Insurance rates are actually cooling in Idaho — rising just 5 percent on average next year — and many parts of the country. For the first time, average premiums for the most popular plans are falling in the 39 states with federal-run insurance marketplaces. A few insurers who fled Obamacare years ago amid mounting financial losses are coming back.

Still, the law remains under attack from Republicans who still vow to repeal it and the Trump administration, which is asking federal courts to overturn protections for pre-existing conditions and issuing regulations promoting coverage alternatives. The Trump administration says it wants to create more affordable insurance options outside of Obamacare for millions of middle-class Americans who’ve been priced out of the law’s marketplaces. Those steps will likely appeal to healthier patients attracted to cheaper, less robust health plans, which could cause sicker patients left behind in the Obamacare marketplaces to face spiraling costs.

Nobody really knows exactly how the GOP changes will affect insurance markets a few months from now. Year after year, critics predict the Obamacare markets will implode — and year after year, they don’t.

Nearly 12 million people signed up for coverage in the Obamacare marketplaces this year, only a slight enrollment dip from 2017 despite the Trump administration’s early efforts to dismantle the law and scale back outreach efforts.

In recent months, though, the administration has taken major steps to expand access to cheaper, less comprehensive coverage. It issued rules encouraging small businesses and individuals to band together in so-called association health plans outside of the Obamacare marketplaces. It also significantly expanded the shelf-life of short-term health plans, which often exclude coverage for pre-existing conditions and Obamacare-mandated benefits like prescription drug coverage, mental health and maternity care.

Just last week, the administration said it would give states greater leeway to bend Obamacare rules, even allowing for federal insurance subsidies to flow to health plans that don’t meet the health care law’s coverage requirements. Those changes are likely to further force splintering along state lines, as red states embrace the Trump administration’s looser regulations and blue states take steps to protect their Obamacare marketplaces.

“We are continuing our efforts to mitigate the damage caused by Obamacare,” said CMS Administrator Seema Verma at the time.

An early test of that new flexibility could come in Idaho, which has pushed more aggressively than any other state to dodge Obamacare rules. Early this year, state officials announced a plan to let insurers sell health coverage exempt from some Obamacare requirements, including provisions banning insurers from charging more or rejecting customers based on a health condition. But Idaho went further afield from Obamacare than even the Trump administration thought was legal. The administration never signed off.

Idaho officials insist they aren’t trying to sabotage the state’s Obamacare marketplace, but rather to bolster it by bringing in more customers. They stress all people buying coverage in the individual market — whether in Obamacare or skinnier plans — would be yoked together in one risk pool, preventing insurers from trying to cherry-pick healthier customers.

“This screams for something to be done,” said Little, the lieutenant governor. “Not only in Idaho, but in other states. We know that there’s about 10 or 12 states that are very interested.”

Little says the Trump administration’s health care moves, particularly the expansion of short-term plans, won’t help the state’s goal of improving its Obamacare marketplace. Dean Cameron, the Idaho insurance director, said the state could eventually forge ahead with its plan without the Trump administration’s permission, though it would undoubtedly invite lawsuits from health care advocates.

Cameron contends the Idaho plan would comply with Obamacare’s requirement that states “substantially” enforce the law. He pointed out the Obama administration took executive action to extend plans that didn’t comply with Obamacare amid public backlash over coverage cancellations when the law's insurance marketplaces launched in 2013.

“I reject the notion that I need to ask permission to do what is already constitutionally and statutorily afforded to me,” Cameron said.

The policy fight between Idaho and the feds matters little to Idahoans like Semele Freeman-Hall, a 48-year-old hairdresser and real estate agent in Boise with a 3-year-old son. She simply wants cheaper coverage options.

Freeman-Hall earns too much to qualify for federal insurance subsidies — the threshold is about $65,000 for a two-person household — and says she can’t afford coverage on the state’s Obamacare marketplace. Even a high-deductible plan would cost at least $600 per month.

She has paid the individual mandate penalty — which goes away next year — and hopes to avoid expensive medical procedures.

“I just don’t have the income and the premiums kept going up, getting higher and higher,” Freeman-Hall said. “I was getting fined for something that was out of my hands, out of my control.”

She’s not alone. The share of Idahoans buying coverage in the individual market without help from federal subsidies plummeted from 30 percent in 2014 to less than 12 percent this year, according to Blue Cross of Idaho. The company, which was an early supporter of the state’s plan to offer alternative health plans, estimates there are at least 110,000 uninsured people in the state who can’t afford Obamacare coverage.

“We completely supported the state in their efforts to try and create some kind of sustainable market for those who have been priced out,” said Peter Sorensen, Blue Cross of Idaho’s vice president for individual and government markets. “We thought that was a great response to the market.”

Chris Stroh’s experience with Idaho’s exchange couldn’t be more different. Before the marketplaces opened in fall 2013, she was paying $525 per month for coverage from her previous job. This year, because she qualifies for federal subsides, she’s paying about $250 per month for a low-deductible Blue Cross plan.

Stroh, a 57-year-old self-employed property manager, has significant medical needs that would cost her about $1,000 per month for prescription drugs if she didn’t have insurance. In September, she had heel surgery that would have cost $25,000 without coverage. Instead, her plans caps her annual out-of-pocket costs at $3,500.

“I’ve been relatively suspicious that it could be such a good deal,” Stroh said. “A couple of times I called them back and said, ‘Are you sure?’”

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