While health care has largely been eclipsed in national media, significant policy decisions are happening in states, like Idaho, that may fundamentally alter the insurance landscape everywhere. Governor Butch Otter is quickly moving to expand Idaho’s Medicaid program and alter its insurance exchange ostensibly to lessen skyrocketing premiums. The governor’s plan, now being considered in Idaho’s state legislature, would restructure the current eligibility for the state’s health insurance exchange to allow childless working adults to buy subsidized health insurance on the marketplaces while moving the state’s sickest adults onto Medicaid.
While premium decreases are possible under Governor Otter’s plan, they will be subsidized by rising costs to taxpayers, and most likely be temporary at best. It’s estimated that his proposals would cost taxpayers roughly $73 million. That number should raise a red flag for anyone concerned about the fiscal well-being of Idaho and the long-term solvency of the state’s health care system. And while Governor Otter’s office claims these proposals are “budget neutral,” that is in no way a certainty in the particularly volatile health care market.
To implement this program, Idaho would need to seek a Medicaid waiver from the U.S. Department of Health and Human Services (HHS). Approval of this waiver would be a misguided decision for patients and taxpayers in Idaho, but also for patients and taxpayers all across the entire country. What Governor Otter also overlooks is the potential for these changes to create disruption in the care of chronically ill patients while over burdening safety-net providers. This becomes particularly problematic when considering that Governor Otter is choosing not to implement more free market health insurance stabilization policies with proven track records.
Driving chronically-ill patients currently covered by private plans onto the public rolls could overwhelm an already over-extended state Medicaid program. Idaho currently faces a significant provider shortage, which stands to worsen if proposed cuts to Medicaid provider reimbursement rates go into effect. Additionally, an influx of chronically ill patients could overwhelm Idaho’s current network of Medicaid providers, reducing overall patient access for these new critically ill entrants, as well as the vulnerable patients already covered by the program.
But this disruption also extends down to the individual. The chronically-ill patients who Governor Otter has proposed to move onto Medicaid already have extensive medical histories and relationships with providers who have overseen their long-term treatment. There is no guarantee those same providers and medications will be available on a patient’s new Medicaid plan. Additionally, these patients may be required to go through additional treatment authorization processes in order to keep the same continuity of care. These logistical hurdles may create disruptions in treatment, potentially exacerbating medical issues and increasing overall health care costs.
Other states have sought to improve their individual markets and tackle uninsured rates through far less disruptive methods. One policy alternative showing signs of success is the idea of reinsurance, which helps mitigate insurer risk in covering patients with high medical costs. It’s shown great success stabilizing marketplaces in rural states like Alaska. And experts in Idaho have projected a potential 10-20% lower premiums if a reinsurance program is enacted in the state. Governor Otter has already signed into law the creation of a reinsurance program for Idaho. This policy solution was heavily vetted, considered, and debated by Idaho’s policymakers. Refusing to implement it and consider its effects would be ill-conceived. Luckily for Idahoans, the Idaho Freedom Foundation is fighting the good fight and educating citizens about this misguided effort.
Health care in rural states like Idaho needs fresh ideas and new tactics to improve both affordability and quality. But the personal nature of health care means lawmakers like Governor Otter should tread lightly in formulating new policies. For those who want to improve Idaho’s current health care system, they need not go back to the drawing board. And on the other hand, for those opposed to Obamacare and want to replace it, waiver programs like those being proposed by Governor Otter will make it even harder to do so. Essentially, these proposals are somewhat antithetical to both sides of these debates.
Furthermore, if you look at the projected costs for a state like Idaho, it’s difficult even to imagine their magnitude should states like California, New York or Texas attempt to do the same. It is a surefire receipt to break the system, forcing state taxpayers to foot the bill.
Matthew Kandrach is president of CASE, Consumer Action for a Strong Economy, a free-market oriented consumer advocacy organization.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.