You Can Rent Your Own Private Idaho

The Patient Protection and Affordable Care Act (Obamacare) is the law the Republican love to hate. They have spent eight years campaigning on the promise to Repeal and Replace or simply to Repeal the PPACA. The Republican controlled Congress passed over 60 meaningless bills, some just so that newly elected members could have the opportunity to cast a vote. It was only after the 2016 elections, when the R’s retained control of Congress and captured the presidency, that real action seemed unavoidable. We know how that worked out.

The strategy has shifted from repealing the PPACA to simply sabotaging the law. The recent tax law, with the elimination of the financial penalties for failing to own compliant coverage, is instructive in its construction. The Republican controlled Congress determined that it could not repeal Obamacare, nor could they remove the Individual Mandate from the law. They were forced to remove the penalty for not complying with the law. The law still stands.

And that brings us to Idaho

We have been talking about Idaho Governor C. L. “Butch” Otter (real name!) and his decision to create a whole new class of health insurance policies, one that looks suspiciously like the health insurance policies the PPACA eliminated. Governor Butch wanted to return to a time of medical underwriting, limited benefits, and policy caps. You know, the good old days. The details can be found in the blog post Rotten Potatoes. With the help of his insurance commissioner and our friends at Blue Cross of Idaho, Governor Butch was trying to leave the ultimate destruction of the individual health insurance market as his legacy.

Blue Cross of Idaho was prepared to announce plan designs for the new policies within weeks of the announcement that the walls had been breached and that the PPACA was about to fall in Idaho. And that is when the U.S. Department of Health and Human Services decided to do its job. This is the link to the letter to Idaho’s Governor.

The letter, signed by Seema Verma the current Administrator of the Centers for Medicare and Medicaid Services (CMS), echoed the Trump Administration position that the Patient Protection and Affordable Care Act is the worst thing that ever happened to Americans, “However, the PPACA remains the law and we have a duty to enforce and uphold the law”. And since the law is the law, you can cut corners but you can’t stage a blatant frontal attack.

Ms. Verma’s letter noted that the plans that Idaho wanted to create failed to comply with the law on numerous levels and that CMS, her agency, would be required to step in if Idaho chose to ignore the issues. She also detailed the fines that could be levied against any insurer who chose to participate in the Idaho scheme. Her public protection train doesn’t derail until the 4^th page of her letter when she suggests that Idaho should focus on “short-term, limited duration health insurance”. You can’t own your own Private Idaho, but you can rent it.

This blog has discussed the value and problems of short term major medical policies. I normally have between 20 and 25 clients on short term policies. These contracts serve as the safety valve for

• Individuals who accidently missed the enrollment period
• Make too much to qualify for a subsidy but find the premiums too expensive
• Make too little for a subsidy, don’t want to be on Medicaid, and couldn’t afford a regular policy

Short term policies ask a few underwriting questions, are for a limited number of days, and don’t cover preexisting conditions. These plans are not designed to be a permanent health insurance solution. The Idaho plans were. Idaho was trying to syphon off the healthiest risks to policies that would be useful – until they weren’t. As soon as an insured got sick, pregnant, or injured, the plan was to move them to the guaranteed issue, preexisting condition covering, safe haven policies of Obamacare. The healthy and lucky could stay on the special Blue Cross of Idaho policies forever, protected from the responsibility of being part of the general population risk pool.

There are ways to make the PPACA work better. Undermining the law, whether directly or indirectly, will not help us in the long run. Destabilizing the individual insurance market by eliminating the funding for the Cost Sharing Reduction Subsidies, defanging the Individual Mandate, or promoting short term contracts in lieu of comprehensive health insurance, hurt the American consumer. The residents of Idaho, and all of the other states, would be better served with an administration that was less focused on short cuts and work-arounds and more prepared to help the law achieve its stated goals – patient protection and affordable care.

DAVE

www.cunixinsurance.com

Photo – Lost in my Private Idaho – David L Cunix

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