Idaho has unveiled a plan that will allow health insurers to sell cheaper plans that do not carry some of the same protections as those offered under Obamacare.
Under the state's proposal, insurers would be able to sell plans that deny coverage for pre-existing illnesses for up to 12 months unless the customer already had continuous prior coverage. Insurers wouldn't be obligated to cover children's vision or dental care, and would need to offer only one plan with maternity coverage, rather than only plans that include it.
The proposal would allow insurers to charge people more based on where they live and based on their medical history and their age. Insurers would be able to cap their own costs at $1 million a year per customer and could charge customers separate out-of-pocket maximums for different services, whether for medicines, doctor visits, or time spent in the hospital.
Under Obamacare, health insurance plans are required to provide a range of medical services and people cannot be charged more or denied coverage based on an illness. Idaho officials will still require insurers to offer at least one plan that meets Obamacare's requirements.
Dean Cameron, the Idaho Department of Insurance director, said that the plan is needed so that more people can have some level of health insurance, because they would otherwise choose to go uninsured due to increasingly high premium costs.
“There are other states that have been talking about it, but we may be out in front,” Cameron told the Associated Press. “They may look to follow us should be we successful.”
Premiums are expected to increase again in 2019 following congressional Republicans' repeal of the individual mandate penalties, which will go into effect next year. The provision obligated adults to buy health insurance or pay a fine, and insurers expect that without the obligation fewer healthier people will enroll in plans they must buy themselves, which as a result will drive up costs.
Though most customers who buy coverage through the Obamacare exchanges get federal subsidies that make their health plans less expensive to them, millions of people do not qualify for these subsidies. The cut-off is an income of 400 percent of the federal poverty level, which is $48,240 for an individual.
Less expensive medical plans could be a draw to this group of unsubsidized people, particularly those without pre-existing illnesses like cancer or diabetes.
The state has not received approval from the federal government to carry out these measures, and it's not clear that they could legally implement the proposal. Even if the federal government were to give it the green light through a waiver provision in Obamacare, the state would likely face lawsuits from pro-Obamacare groups.
The Trump administration is drafting a proposal to allow health insurers across the country to offer similarly less robust plans, including those considered "short-term" but that may be purchased for nearly a year.