Blue Cross Idaho Unveils 5 Non-ACA Compliant Health Plans

February 21, 2018

In response to Governor C.L. “Butch” Otter's executive order allowing Idaho insurers to offer insurance plans that do not comply with the Affordable Care Act, Blue Cross Idaho introduced Freedom Blue, 5 individual health insurance plans.

In its bid to provide more insurance options for more than 100,000 uninsured individuals in the state, Blue Cross of Idaho introduced 5 new individual health insurance plans that do not comply with the Affordable Care Act (ACA) to Idaho insurance regulators.

The plans, called Freedom Blue, come a month after the state's Governor C.L. “Butch” Otter signed an executive order loosening ACA rules and directing the Idaho Department of Insurance (DOI) to use flexibility to create guidelines for Idaho insurers to offer insurance at a lower cost. According to Otter, the elimination of the individual mandate means there will no longer be penalties for purchasing coverage that doesn’t meet ACA requirements.

While individual health plans are being introduced, Idaho will still offer ACA plans through Your Health Idaho, which provides options for individuals and families who receive a federal subsidy that lowers the monthly premium cost, according to the insurer.

“As a not-for-profit health insurance company, Blue Cross of Idaho is committed to the health and wellness of our community. What Idahoans want is a stable, functional market,” said Charlene Maher, president and CEO, Blue Cross of Idaho, in a statement. “The current marketplace is not affordable for middle-class families. Our new state-based plans are a response to Governor Otter’s executive order, which begins to solve the issues that have kept middle-class Idahoans from buying health insurance.”

If approved by the DOI, the new plans would allow residents to choose the benefits they want at a cost that is up to 50% less than similar ACA-qualified plans, according to the insurer. Much like ACA plans, health benefits include prescription drug coverage, doctors, specialists, emergency services, urgent care, hospitals, physical therapists. Deductibles range from $2000 to $10,000, and the plans have an annual $1 million per-person limit. If exceeded, a customer would be enrolled in 1 of the ACA-compliant plans in the exchange. One of the plans won’t cover maternity care.

Under the Freedom Blue plans, Blue Cross would have the ability to look at a patient’s medical history through a questionnaire inquiring about the patient’s health, allowing them to charge more for those more likely to require medical care, which is prohibited under the ACA. The plans will likely attract younger and healthier individuals, who would see lower premiums.

For a 21-year old under the $4000 deductible plan, premiums would range from $89.91 to $242.79, compared with $237.60 under a comparable plan on the exchange. Under the same plan, a 65-year-old would see premiums ranging from $359.67 to $971.25, compared with $712.80. For a family of 4 aged 39, 30, 12, and 8, the premiums would range from $435.58 to $1176.24, compared with $933.05.

In response to the plans, 15 patient groups wrote a letter to HHS secretary Alex Azar urging him to declare the move invalid. The organizations, which include the American Heart Association and the American Cancer Society Cancer Action Network, argue that the state’s action would “seriously injure Idaho patients and consumers and significantly destabilize Idaho’s entire health insurance market.”

According to the organizations, those who purchase these plans may not be covered for essential health services and would likely pay more out of pocket for services that are covered, older Americans would be charged up to 5 times the premiums for younger Americans, and those with pre-existing conditions could be charged up to 50% more than what they would otherwise pay.

However, as a member of the Trump administration, Azar might be unwilling to block the Idaho plans. The administration has been moving toward allowing more flexibility in healthcare. The administration just proposed allowing more flexibility among health plans by extending the life of short-term, limited-duration insurance plans from 3 months to 12 months.