State lawmakers got proof last week that Idaho’s state health insurance exchange is working, as they collected nearly $29 million in savings from the state’s Catastrophic Health Care program budget.
The CAT fund is the state portion of Idaho’s system for paying the catastrophic medical bills of Idahoans who can’t cover those bills. Counties cover the first $11,000 of each bill from local property taxes; amounts exceeding that are picked up by the state. People whose bills are covered get liens placed on virtually everything they own, including their estates when they die, but relatively little is recovered.
The CAT fund has been spending less than anticipated, both last year and this year, as more Idahoans have gotten health insurance. Nearly 100,000 have signed up for insurance plans through the exchange, with most getting subsidies to make it more affordable.
Idaho lawmakers approved the Your Health Idaho state exchange in 2013 after a multiyear fight, at Gov. Butch Otter’s urging.
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“It’s been, in my opinion, a glowing success,” said Sen. Dan Schmidt, D-Moscow, a physician who led the move in the Legislature’s budget committee Friday to reduce the CAT fund budget, generating big savings for the state’s general fund.
Otter had recommended transferring $16.9 million in unspent funds from fiscal year 2015 from the CAT fund back to the state general fund. Schmidt proposed a larger transfer of nearly $29 million. The fund still will have enough to continue covering its bills. Schmidt’s proposal won unanimous support in the joint committee. It still needs passage in the House and Senate to become law, but budget bills rarely change once they’re set by the Legislature’s Joint Finance-Appropriations Committee.
Schmidt said the CAT fund won’t go away, but having more Idahoans insured through the insurance exchange has reduced costs for the state.
Legislative analyst Jared Tatro said three factors appear to be contributing to the decline in CAT costs, with the insurance exchange by far the largest. The other two are 2010 legislation that required people applying for the fund to go through an eligibility process that first determines if they’re eligible for Medicaid; and the institution of medical reviews, in which the CAT fund has a contractor question the medical necessity of each service provided and reject those not deemed necessary. Idaho’s Medicaid program largely covers only children and the disabled.
The CAT fund’s total costs were $36.3 million in fiscal year 2015, down from $51.5 million a year earlier. State costs were $19 million, down from $28.4 million in 2014. The program hit its peak in fiscal year 2012, at $55 million in costs, $38.6 million of that from the state and the rest from county taxpayers.
While the catastrophic costs are falling, Schmidt said paying for health care for low-income people that way isn’t efficient and “isn’t healthy for the economy.”
Idaho lawmakers have been unwilling to consider expanding the state Medicaid program to cover residents who don’t make enough to qualify for subsidized plans on the insurance exchange, though expansion would be largely federally funded. Schmidt noted that Idaho’s CAT program is not insurance but a mechanism for paying catastrophic medical bills after they’re incurred.
“I believe people in the state of Idaho should have health insurance, and we have a way to do it,” Schmidt said. “It’s very affordable, and it will make health care very accessible.”
This year, Otter is proposing a $30 million state-funded program to provide some limited preventive and primary health care to the 78,000 Idahoans who make too little to qualify for the exchange but too much to qualify for Idaho’s Medicaid program.
Backers of Otter’s new Primary Care Access Program acknowledge that it falls short of expanding Medicaid and providing all those people with coverage.