The counsel for Blue Cross and Blue Shield of Idaho released a twelve page letter defending the state plan to effectively ignore the ACA’s requirements for the individual market. There is a massive loophole that he just leaps over as he argues that the plan provides adequate consumer protection.
Insurers may be required to offer a single on-Exchange Silver and a single on-Exchange Gold plan but there is no requirement that they actually need to sell a policy. The rest of this post is a riff on Freedom Life’s system.
Freedom Life is an insurance carrier that offered plans in many states over the past couple of years. They offer a single off-Exchange Bronze plan in each state that they are in. Most of their states, they sell absolutely no policies. Their ACA compliant plan is, in my opinion, the result of a very cautious legal department. They instead make their money selling limited benefit plans.
If I was in charge of a company that wants to make money in the Idaho state plan market, I would design my on-Exchange offerings so that they would not sell. I would rent the narrowest legal network from a national rental network provider and offer to pay 500% of Medicare for my on-Exchange products. If the rental network asks for 700%, I’ll agree. We’ll fight over the pricing and network for the state underwritten products. I would then make the benefit structure as confusing as possible with $200 co-pays for PCP services and no cost sharing for ER visits. My goal would be to develop a Silver and Gold plan that no one intentionally buys.
That is the easiest loophole to exploit in Idaho.