New bill would create waiver system in place of Medicaid expansion
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BOISE — Following Gov. C.L. “Butch” Otter’s executive order on health insurance, the legislature is spinning out health care bills.
The Idaho legislature recently presented a bill to the House Health and Welfare committee that would allow people living under the poverty level to receive government help in paying for health insurance. It would also allow people with expensive health conditions under the age of 65 to receive Medicaid.
“Instead of bringing the Medicaid line up, we’re bringing the insurance and subsidy line down to match,” Dean Cameron the Director of the Department of Insurance, and one of the bill’s sponsors told EastIdahoNews.com. “So, there will be less of a gap or fewer people caught in that gap.”
The bill does this by creating two waivers. One waiver would apply to families and individuals who don’t make enough money to afford health insurance but make too much money to qualify for Medicaid. This is commonly known as the Medicaid gap. The waiver would allow these people to apply for assistance in purchasing healthcare on the Idaho Healthcare Exchange.
This waiver is called the 1332 State Innovation Waiver.
The other waiver, called the 1115 Waiver, applies to those under 65 who have serious health conditions but don’t qualify for a tax credit on the healthcare exchange. This waiver allows these people to receive Medicaid.
Cameron said these people would have the opportunity to have better coverage for lower out of pocket expenses.
“The purpose of the 1115 Waiver is to take those individuals with high cost, complex, end of life conditions and give them the ability to move over from private coverage to Medicaid,” Cameron told EastIdahoNews.com.
Cameron explained this waiver could not only save the individual money but could possibly reduce insurance rates overall.
“In the individual insurance market, last year, we paid about $601 million out in claims,” Cameron said. “Moving about 2,500 citizens from private coverage to Medicaid, with these certain conditions, would take $200 million of that $600 million off of the claims. Which would reduce rates to citizens by 20 percent.”
It could also save the federal government around 25 percent in health care costs, he said.
“The savings comes because Medicaid’s contracts — particularly on the pharmaceutical side, but also in some other areas — they pay a lot less on those services than what private insurance is able to negotiate with the providers,” Cameron explained. “That savings is then used for the 1332 waiver.”
Rep. Byan Zollinger, (R-Idaho Falls) who serves on the House Health and Welfare Committee, told EastIdahoNews.com said there is no guarantee the bill would bring health insurance costs down.
“I think it’s got a hefty price tag,” Zollinger said. “We’re not fixing healthcare costs at all; we’re just shifting the cost. It’s a boon to insurance companies. It costs taxpayers $100 million — whether you want to say that’s state money or federal, that’s still a cost.”
While Cameron said the bill, specifically the 1332 waiver, is not Medicaid expansion, Zollinger said it is in the sense that it adds people to Medicaid.
The 1332 State Innovation Waiver would allow families or individuals who fall within the Medicaid gap to receive a tax credit to purchase health insurance from Idaho’s healthcare exchange Your Health Idaho.
“The 1332 waiver is intended on helping citizens that fall into that gap obtain a subsidy,” Cameron said.
Those who wish to obtain a health insurance subsidy must file income taxes. Cameron said there are around 35,000 Idahoans who fall under the 100 percent federal poverty level who still file income taxes. The waiver will allow those 35,000 to receive help in purchasing health coverage.
Cameron said this waiver essentially closes the Medicaid gap without expanding Medicaid. Something he said Idaho will not do.
“Instead of expanding Medicaid, if you will, we’re expanding the option of receiving assistance to be able to purchase private coverage,” Cameron said.
Zollinger said he approves of some parts of the of the State Innovation Waiver but wishes they would have incorporated Gov. Otter’s executive order, that allows insurance providers to sell plans that don’t meet ACA standards, into the waiver.
“I think that’s what is really going to drive healthcare costs down,” He explained. “If these insurance companies are able to tailor plans to individuals so we can buy coverage for things that we need coverage for.”
Cameron said the waiver bill, even if it passes in the Idaho legislature, will have to be approved by the federal government.
The bill is also sponsored by Russ Baron, the Director of the Department of Health and Welfare.
Zollinger said he is working with around 20 other legislators and outside conservative groups to put together a bill that would address the issues Cameron’s bill does not.
“Getting some work requirements, allowing insurance companies to sell plans that don’t comport with the ACA, adding a direct primary care network throughout the state through the Department of Health and Welfare and a few other things,” he said.
He hopes to present the bill later this week.