‘Obamacare’ brings a new world for Idaho insurers

Health care companies battle a flood of misinformation and logistical headaches to comply with the law.

adutton@idahostatesman.comNovember 12, 2013 

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Dave Jeppesen, senior vice president of sales and marketing for Blue Cross of Idaho, testifies before the Legislature’s joint health care task force about grandfathered insurance policies and the Affordable Care Act. He said Blue Cross in 2010 grandfathered the health insurance plans held by more than 40,000 Idahoans and 30,000 small businesses, giving them the ability to keep those plans in 2014 even if they don’t offer the broader coverage required under the Affordable Care Act. However, turnover — often resulting from life changes, such as aging off a parent’s policy, moving or being between jobs — caused more than half of those members to lose grandfathered status.

JOE JASZEWSKI — jjaszewski@idahostatesman.com

  • LIVE CHAT WITH INSURERS

    Representatives of Idaho’s largest health insurance companies will participate in a live chat Friday, Nov. 15, hosted by the Idaho Statesman. They will answer questions about the Affordable Care Act’s changes to health insurance for employers and individuals. The chat starts at 11:30 a.m. at IdahoStatesman.com.

On a recent Monday afternoon, the man in charge of a multiyear health-care reform rollout for Idaho’s largest insurer went before state lawmakers.

They wanted to ask him questions on the record, having just spent the previous week trying to calm constituents who’d read or heard news stories about how Americans will lose their insurance plans because of the Affordable Care Act.

Prompted by members of the Joint Health Care Task Force, Dave Jeppesen, Blue Cross of Idaho’s senior vice president of sales and marketing, explained: The company had “grandfathered” everyone who had an insurance policy in 2010, allowing them to keep even the skimpiest benefits instead of switching to the robust packages required under the health care reform act.

The only people whose plans will vanish like pumpkins on Jan. 1 are those who changed, dropped or added to a plan in the past three years, he told the committee.

“We are not throwing members off the rolls. ... That’s not in their best interest nor ours,” Jeppesen said. “I can assure you, we want to keep as many of our customers as possible.”

The confusion about grandfathered and canceled health plans is the latest headache for Idaho health insurers, who say the past few years not only changed how they do business but gave them a seemingly endless task: explaining the Affordable Care Act.

Idaho’s insurers were among the first to build websites — emblazoned with their logos and company names — telling Idahoans how their insurance benefits, shopping options and out-of-pocket costs are changing next year, with the rollout of the Idaho health insurance exchange and the mandate requiring all Americans to have insurance.

Jeppesen says Blue Cross of Idaho is now spending about 50 percent of its information-technology resources on the Affordable Care Act rollout.

The company also made a deal with local libraries to offer help to the public.

“It’s kind of like having to set up an entirely new way of doing business while [you] continue to do stuff the old way,” says Karen Early, spokeswoman for Blue Cross of Idaho. “[Or] setting up a new company to run inside of your current company.”

She offers an example: a little-known change in how insurers are allowed to cancel policies for people who don’t pay their premiums.

In the old system, if your premium was due the first of the month, you had a grace period through the end of the month to pay up or lose coverage.

Now, the rules have changed, but only for people who buy policies on Idaho’s health insurance exchange using a subsidy (a premium tax credit). For that set of customers, Early says, the insurance company must continue paying claims for 30 days. Then from day 31 to day 90, the company can mark claims as “pending,” without paying them.

“Providers have got to come to us and ask us, ‘Is this person eligible?’ ” she says.

On the 90th day, the insurer can drop the customer. But by that time, the federal government has sent 90 days’ worth of subsidy money to the insurer, “and then we’re going to have to refund [the money] back to the government,” Early says.

There’s one more twist. If the customer makes catch-up payments equal to 95 percent of the overdue amount, the insurer is not allowed to cancel the plan.

“You talk about, as a business, how different this is to manage? Can you imagine all the rules, billing [and other systems] we have to put in place to track people’s payment?” she says.

As a result, Early says, Blue Cross has been urging medical providers to be extra diligent about checking their patients’ insurance coverage.

“It doesn’t just affect us, it affects doctors and hospitals,” she says. “What it means is setting up whole different patterns and desktop procedures. … We have to have new codes in place, [to] create new categories to track people.” The timing to send letters out and the letters themselves have changed, she says.

Like many of the new rules, the 90-day exception is meant to give consumers a break, she says.

“I’m not casting that change in a bad light,” she says. “Suppose I live alone, and I’m unconscious in the hospital for 30 days. … Under the new law I wouldn’t lose coverage. ... It just requires a significant amount of work on our side to make sure we can implement that.”

After nearly four years of work, insurers still have a barrage of new questions and problems in front of them.

Georganne Benjamin, spokeswoman for Regence BlueShield of Idaho, took a few minutes in late October to tell Business Insider what it’s like inside the Downtown Boise headquarters of Idaho’s second-largest insurer.

“It’s a lot of answering questions, for sure,” she says. She was scheduled to huddle with the company’s customer service director over what questions had arisen from the national Affordable Care Act news story du jour — the canceled health plans.

The company itself isn’t immune to rumors and misunderstandings about what the law is doing. Benjamin says “there was a lot of confusion” over a potential one-year delay of the individual mandate. If the federal government might delay its rule for all Americans to have insurance, wouldn’t that mean this fall’s enrollment period would be extended, too?

“No, it’s still Oct. 1,” Benjamin says.

But the hardest job insurers have right now may be convincing customers that when premiums go up, it’s for a good reason.

“The biggest concern right now is the cost of the new policies, because there’s more benefits and they come at added cost,” Benjamin says. “And I think that’s hard for people to really understand, because I think a lot of people were under the impression that reform would address the costs, and unfortunately it addressed access and did not address costs.”

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Audrey Dutton: 377-6448, @IDS_Audrey

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