Individual health plans under the Affordable Care Act (ACA) are in a state of serious disrepair. The deep structural problems with these plans cannot easily be fixed. The main issue is that the benefits packages are too generous—and there is not enough revenue coming in to fund them, as young and healthy individuals and families desert the plans in increasing numbers. The danger of implosion is everywhere. In Idaho, the rate increases in individual ACA-compliant plans for the last three years—12% in 2016, 24% in 2017, and 27% in 2018—explain why middle-class families have quit the exchanges, even though their income is too high to qualify for either Medicaid or ACA subsidies, leaving them with no coverage at all. Faced by this breakdown, Idaho Governor Butch Otter issued an Executive Order directing the Idaho Insurance Department to devise “creative options” to expand market access. As a legal advisor to Blue Cross of Idaho (BCI), let me explain what was done and why.
The key challenge is to promote access, but without some of the ACA's most onerous features, such as premium compression by age and no restrictions on coverage for preexisting conditions when there have been coverage breaks. It would be folly in a system of federal dominance for states to allow local insurers like BCI to junk all ACA-compliant plans. But the same conclusion does not apply to a program in which all these plans are left untouched. Subsequent to BCI and other companies would like to offer, alongside ACA-compliant plans, a more basic state-compliant plan that may well prove attractive to those people who today have no coverage at all. These other plans are to remain in the same risk pool as the ACA plans. Anyone who wants to enroll in the ACA-compliant plans may do so. The new Idaho program simply increases the options.
