Congressional Republicans failed to repeal or replace Obamacare. But one state has come up with a way to get around it. Idaho is dealing with Obamacare by just blowing it off. If it works, other states seem likely to follow.
Idaho’s Republican governor, Butch Otter, signed an executive order last year paving the way for non-Obamacare-compliant health insurance plans to be sold in his state, and Lt. Gov. Brad Little has since cobbled together what is sure to be the nation’s most controversial healthcare initiative. Their principal intention is to give the people of their state a way of avoiding Obamacare’s monstrous increases in insurance premiums. They want to put affordable insurance plans on the market again.
Obamacare’s spiraling premium increases have especially hurt middle-income consumers, who have had to pay the whole cost without getting the government subsidies that apply to poorer people. Those people have either gritted their teeth and bought expensive policies or, in many cases, chosen instead to break the law, pay the fine, and do without insurance. In Idaho, at least, they will be able to select from among plans that don’t fulfill all of Obamacare’s expensive criteria.
The scheme appears to flout federal law, so there was some doubt that insurers would be interested in participating at all. But this week, Blue Cross of Idaho stepped up and made it clear it would do so.
On Wednesday, the company provided information about one of the five such plans it intends to offer, called “Freedom Blue Standard.” This is designed to be comparable in most respects to Obamacare Exchange bronze plans. The two have similar deductibles, rates of coinsurance, and out-of-pocket maximums.
But there are also a few critical differences. Because it allows some health underwriting, which is pricing based on health, and because it caps lifetime benefits at $1 million, the Freedom Blue Standard plan is available to the healthiest buyers for as little as 40 percent of what the bronze plan costs, depending on age. Setting aside the rate for the healthiest, the average buyer of Freedom Blue Standard saves 26-66 percent of the price he or she would pay for an Obamacare bronze policy, depending on age.
So, just as the children of Lake Wobegon are all above average, Idaho insurance customers who stay in Obamacare’s bronze plan would all pay above the average price for consumers in a scheme that involves health underwriting.
Obamacare’s tradeoff for the higher prices is supposed to be that the sickest patients, with the most expensive pre-existing ailments, get insurance for the same price as everyone else. Yet, the Freedom Blue offering already indicates that this benefit is modest at best. The sickest and most expensive patients, it turns out, would be charged only 25-35 percent more than the rate that everyone currently enrolled in Obamacare must pay.
Idaho’s experiment is a bold one, and it is sure to be challenged in court if anyone can figure out how to do it. But already it has helped quantify the punishing and unnecessary expense that Obamacare has imposed upon the 9 percent of people who buy insurance on the individual market.
The Idaho experiment prompts us to ask why the public should keep paying so much for health insurance when there is a simple alternative. And why should taxpayers subsidize insurers that demand such high premiums, when an affordable system is there for the taking the very moment we clear aside Obamacare’s wreckage?
