BOISE - Lawmakers got proof Friday that Idaho's state health insurance exchange is working, as they collected nearly $29 million in savings from the state's Catastrophic Health Care program budget.
"It's been, in my opinion, a glowing success," said Sen. Dan Schmidt, D-Moscow, a physician, who led the move in the Legislature's joint budget committee Friday to reduce CAT fund budget, generating big savings for the state's general fund.
Idaho lawmakers approved the Your Health Idaho state exchange in 2013 after a multi-year fight, at Gov. C.L. "Butch" Otter's urging.
"This, to me, is an example of a courageous effort both by the Legislature and our governor to accomplish this," Schmidt said, "and I'm very happy that we've been able to do this. And I'm glad that we can return this to the general fund."
The CAT fund is the state portion of Idaho's system for paying the catastrophic medical bills of Idahoans who can't pay up. Counties cover the first $11,000 of each bill from local property taxes; amounts exceeding that are picked up by the state fund. People whose bills are covered get liens placed on virtually everything they own, including their estates when they die, but relatively little is recovered.
The CAT fund has been spending less than anticipated, both last year and this year, as more Idahoans have gotten health insurance; nearly 100,000 have signed up for insurance plans through the exchange, with most getting subsidies to make it more affordable.
Otter recommended transferring $16.9 million in unspent funds from fiscal year 2015 from the CAT fund back to the state general fund; Schmidt proposed a larger transfer: $28,892,700. The fund still will have enough to continue covering its bills; his proposal won unanimous support in the joint committee. It still needs passage in the House and Senate to become law, but budget bills rarely change once they're set by the Legislature's Joint Finance-Appropriations Committee.
Schmidt said of the insurance exchange, "That has dramatically affected how much we're affecting costs in the CAT fund, so we've seen CAT fund costs go down. They aren't going away. … But they have gone down. And getting people insured has reduced costs for the general fund."
JFAC Co-Chairwoman Rep. Maxine Bell, R-Jerome, agreed with Schmidt that it's good to see the money return to the state's general fund. "And I'm grateful to those county people who strive diligently to make sure that this CAT fund is used in the way it's intended to help out," she said. "So we'll use this to fight another battle or to do something else."
Legislative analyst Jared Tatro said three factors appear to be contributing to the decline in CAT costs, with the insurance exchange by far the biggest. The other two are 2010 legislation that required people applying for the fund to go through an eligibility process that first determines if they're eligible for Medicaid; and the institution of medical reviews, in which the CAT fund has a contractor question the medical necessity of each service provided and rejects those not deemed necessary. Idaho's Medicaid program largely covers only children and the disabled.
Sen. Shawn Keough, R-Sandpoint, the Senate co-chairwoman of JFAC, said, "I do recall having to increase funding to the CAT fund in past years." She said, "I agreed with Sen. Schmidt's assessment," but said she's reserving judgment on the governor's recommendation for $22 million in funding for the CAT fund in the coming year, fiscal year 2017. "We don't want to over-appropriate scarce dollars, but we also don't want to leave the counties in a bind," she said.
Schmidt, who serves on the CAT board, said, "The costs are going down, they're dropping off, and we've been seeing this now for a year and a half. … The demand is dropping off, and it's because people have insurance."
However, he said he's heard anecdotally that counties haven't seen the drop-off. "They're still getting claims," he said. "They're smaller claims."
Total costs combined between the state and the counties were $36.3 million in fiscal year 2015, down from $51.5 million a year earlier. State costs were $19 million in 2015, down from $28.4 million in 2014. The program hit its peak in fiscal year 2012, at $55 million in costs, $38.6 million of that from the state and the rest from county taxpayers.
Schmidt said, "It's a tough one to estimate. That's, in my opinion, why this should be going away. It isn't healthy for the economy. We need to do this differently. I wish we could talk about that."
He was referring to expanding Medicaid to cover those Idahoans who don't make enough to qualify for subsidized plans on the insurance exchange; lawmakers have thus far been unwilling to consider the move, though it would be largely federally funded. He noted that Idaho's CAT program isn't insurance; it's a mechanism for paying catastrophic medical bills after they're incurred.
"I believe people in the state of Idaho should have health insurance, and we have a way to do it," Schmidt said. "It's very affordable, and it will make health care very accessible."
This year, Otter is proposing a $30 million state-funded program to provide some limited preventive and primary health care to the 78,000 Idahoans who make too little to qualify for the exchange, but too much to qualify for Idaho's Medicaid program. Even backers of Otter's new Primary Care Access Program say it's a step far short of expanding Medicaid and providing all those people with insurance coverage.
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