The old saying goes: “You can never be too skinny or too rich?”
The recent proposal by Idaho Governor Otter and Department of Insurance Director (DOI), Dean Cameron directing Idaho insurers to develop “skinny” health insurance plans for the individual market may prove the saying wrong where health care financing is concerned.
What the Governor has done is to direct the DOI to develop plans for the individual market that “reduce the cost by 30 to 50 percent” by cutting “essential health benefits” and other consumer protections. Today, every insurance policy is required to provide ten essential benefits. This ensures Idahoans can shop among different insurance plans and know they are still getting a solid product with minimal surprises in the fine print.
So, to reduce the cost of the essential benefits by 50 percent, some benefits must go. Mental health and substance use disorder treatment, maternity and newborn care, prescription drugs and pediatric services may be among the services that are no longer guaranteed or are severely limited.
In the good old days, it was common for insurers to discriminate against people with preexisting conditions or in need of certain types of health care. These Idahoans could be charged higher prices—prices that were often so outrageous that they could never afford the insurance. The Governor’s Executive Order takes us back to those days by allowing insurance companies to ask questions about patients and then set prices based on the answers to those questions. For example, they could charge women more than men because women have the potential to require maternity care.
Insurance companies could also implement waiting periods, put caps on benefits, and decide unilaterally to deny patients certain medications or procedures. Today, consumers are protected from waiting periods and caps and insurers can’t deny patients’ services they deem unnecessary – without an independent review based on standards or proven medical practice.
It is difficult to know what Idaho’s “skinny plan” would look like for sure, but you can bet that to get a 50 percent reduction in cost, you need a significant reduction in benefits and the ability to discriminate against people who need care.
Another question is what these products will do to the rest of the market. If only young and healthy people can enroll in the new skimpy plans at a 50 percent price reduction, how much does that drive up health insurance costs for people who need comprehensive coverage?
“Skinny” health insurance plans do not get at Idaho’s core problem: too many Idahoans are already uninsured because they fall into the coverage gap. Letting insurers work around the rules that protect patients is no solution.
Larry LaRocco resides in Boise. He represented the 1st District of Idaho in Congress from 1991-1995.