Idaho opting out of high-risk insurance pool that’s part of federal reforms

Idaho opting out of high-risk insurance pool that’s part of federal reforms

by
Idaho Freedom Foundation staff
May 4, 2010
Idaho Freedom Foundation staff
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May 4, 2010

Idaho won’t be part of a federally funded high-risk insurance pool for people who cannot find health insurance due to a pre-existing condition.  The high-risk pools are one of the state’s early policy decisions to come from new federal health care laws.  Idaho already has a small high-risk pool that won’t change as a result of federal legislation.

Gov. Butch Otter informed the U.S. Health and Human Services Department (HHS) that Idaho will opt out of a plan to expand the state’s pool using federal money to cover people who health insurance companies rejected for coverage due to pre-existing conditions like diabetes and cancer.  Idaho’s high-risk pool, which is run by the Department of Insurance, covers approximately 1,500 people, according to Mark Warbis, Otter’s communications director.

The high-risk pools backed by the federal government are only a temporary measure, scheduled to expire by 2014 when other health care reforms go into effect.  By opting out, Idaho will force the federal government to create a separate high-risk pool.  “In absence of us doing it, HHS will still run one (pool) here in Idaho under their own administration,” Warbis told IdahoReporter.com.  HHS could run the pool itself or could subcontract it to a private insurance provider.  Warbis said Idaho could have received some federal funding to expand the state’s pool, $24 million, which would not have been enough.  “Twenty four million dollars wouldn’t even come close to covering what the cost of that would be.”

Otter has been a vocal critic of the federal health care legislation since before it was passed in March.  He also endorsed Attorney General Lawrence Wasden’s decision to sign onto a multi-state lawsuit challenging the constitutionality of the law’s requirement that people be required to purchase health insurance.

Warbis said the governor is also opposed to the federal high-risk pool because it will send mixed messages to people already enrolled in the state’s plan.  He said people currently in the state pool pay a monthly premium that’s 25 percent higher than a normal insurance plan, but that the federal pool doesn’t have a higher premium.  “It sends a market signal that they’re being penalized for doing the right thing,” Warbis said.  Idaho's high-risk pool is funded by premiums and assessments on insurance providers.

Every state governor had to notify HHS by April 30 if they would opt into the federally-funded pool or not.  Politico reported that most Democratic governors chose to opt-in and most Republican governors opted out, though Wyoming, with a Democratic governor, opted out.

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