Idaho’s gaping loophole

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.






6 replies
  1. 1
    Jay S says:

    Your plan would have to account for the 27% crazyfication factor though. How many (or few) plans can you afford to sell without admin costs becoming a problem? Could it be fought by an organization or competitor buying those ACA plans for people just to break the system? Wouldn’t regulators get a vote? Congress proposes but the IC disposes.

  2. 2
    dr. bloor says:

    @Jay S: Raises an interesting question: is the 27% national crazification factor evenly distributed across states? If not, you’d have to guess that it’s over-represented in Idaho.

    I look forward to the future go-fund-mes from Idaho looking for cash to pay for chemo.

  3. 3
    Yutsano says:

    @dr. bloor: A large proportion of the population of Idaho is Mormon. There is (understandably) a lot of mistrust of the federal government in that faith. It doesn’t keep them from sucking up welfare dollars but the official church position is self-sufficiency. And as little fed involvement as possible.

  4. 4
    Eadgyth says:

    Hi David,

    Completely off topic but something very important for insurance consideration and I wasn’t sure how else to get it to you.

    I follow several people pushing the ketogenic diet. Right now they are gathering statistics on how they can cure (cure = as long as the person remains on the diet, they need minimal to no drug interventions.) Compliance is very high as well. https://link.springer.com/article/10.1007%2Fs13300-018-0373-9 . I point to this one as it came out recently and got published. Dr. Eric Westerman is also doing very interesting things as are several others; only Virta is using this particular high-counseling model that I know of. It’s a cheap and easy fix for many.

    Then in the background there is the “slow moving catastrophe” that I only hear about in ketogenic circles: https://news.un.org/en/story/2011/04/373472-un-urges-action-slow-motion-catastrophe-non-communicable-diseases
    https://www.huffingtonpost.com/2013/09/04/china-diabetes_n_3867778.html
    http://newsroom.ucla.edu/relea.....r-diabetes
    This should be getting a lot more panic and attention than it does. Not only can no one afford it, but so many people suffer and suffer. Poor health and energy. South Pacific islands where Doctors Without Borders goes and amputates limbs all day. Lost vision. Lost lives.

    Basically, if you look at obesity and type 2 diabetes and pre-diabetes, those impacted rise to over 50% in several recent surveys. Go back and look at pictures of “typical people” from 1970 and earlier, and it is striking how thin everyone was. So when it comes to the price of healthcare, how can we possibly forecast it if more than 50% of the population is likely to end up with metabolic syndrome? How can any system possibly keep up? I feel like the rising tide of metabolic syndrome should be *the* thing being discussed.

  5. 5

    @Eadgyth: I do not have any knowledge that is relevant to evaluate anything at those links. I am sorry.

  6. 6
    Libraryguy says:

    xx

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