Idaho's Health and Welfare chief suggests ‘private option’ for health care

Lawmakers hear pitch to insure Idahoans not covered by Medicaid or Affordable Care Act.

LEWISTON TRIBUNEFebruary 21, 2014 

Health care has been a major topic of conversation at the Legislature this year, but with no consensus on how to move forward, about 77,000 Idahoans have been left in limbo.

That’s how many uninsured adults don’t qualify for federal health insurance subsidies — ironically because they earn too little — yet aren’t eligible for Medicaid because of Idaho’s strict program standards.

Lawmakers of every political persuasion have been searching for a solution to the situation, holding weekly meetings and brainstorming ideas. Some want a free-market alternative to Obamacare; others are looking to replace the state’s costly indigent health care system; and still others hold out hope for expanding Medicaid.

A preferred alternative hasn’t been identified, however, in part because philosophies differ so widely.

‘ARKANSAS MODEL’

That became apparent Wednesday, when Department of Health and Welfare Director Richard Armstrong discussed the so-called “private option” or “Arkansas model” with House lawmakers.

The model creates a public-private partnership that could save Idaho more than $100 million over a five-year period, Armstrong said, while providing private insurance for about 104,000 people — the 77,000 uninsured adults as well as another 27,000 people who earn between 100 and 138 percent of poverty.

Although lawmakers were intrigued by his presentation, he said afterward that there’s little chance the Legislature will move forward with the option this session.

House Health and Welfare Chairman Fred Wood, R-Burley, shared that sentiment.

“I don’t see any movement this session that’s different than what the governor outlined in his State of the State address,” Wood said.

“That doesn’t mean there’s not a lot of discussion, (but) we don’t have time to get in place everything we need.”

OTTER WANTS REFORM

For the past year, Gov. Butch Otter has said he doesn’t want to expand Medicaid until various reforms are implemented, both to encourage personal responsibility and to shift from a volume-based fee for service model to an outcome-based scheme that compensates providers based on quality outcomes.

The Arkansas model is an alternative to Medicaid expansion that was first implemented by the Republican-dominated Arkansas Legislature.

Rather than simply steer more people into the Medicaid system, it provides private health insurance plans. The premiums would initially be paid entirely with federal Medicaid dollars. The state would pick up 5 percent of the costs beginning in 2017; that would increase to a maximum of 10 percent by 2020.

By comparison, the required state match for pre-expansion Medicaid programs is 30 percent.

If Idaho were to move forward with this option, Armstrong said, it would include a “poison pill” in the enabling language that sunsets the program immediately if the federal contribution level changed.

“We can’t walk through this door and fall back to the 70-30 split we’re currently under,” he said.

ENDING INDIGENT CARE PROGRAM

The projected savings from this approach come from eliminating Idaho’s indigent health care system, which covers medical costs for people who can’t otherwise afford treatment.

“From 2016 to 2020, we estimate the indigent fund will pay out about $425 million,” Armstrong said. “There are some costs associated with the private option, but we’d still save more than $100 million and it would mean 100,000 folks would have insurance coverage.”

Idaho isn’t unique in having tension within Republican ranks over how to respond to Obamacare. On Tuesday, for example, the Arkansas House voted against funding its own model for another year.

The initial vote was 70-27 in favor of the legislation, but it failed because a three-quarters majority is required on all appropriations bills. News reports said the Arkansas House speaker intends to hold votes until the measure finally passes.

“It’s baffling to me what their Legislature is doing,” Armstrong said. “They’ve enrolled more than 100,000 people, who for the first time in their lives have health insurance. Basically the Legislature is saying it won’t give spending authority for the federal money. I don’t think the story has played out yet.”

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