Idaho, feds wading through details of insurance proposal

Idaho officials are hoping to allow insurers to sell plans that don't comply with former President Barack Obama's health care law. The move is needed to save Idaho's insurance exchange as premiums continue to rise and some healthy residents opt to go uninsured, Idaho Department of Insurance Director Dean Cameron says. But the federal government hasn't signed off, with agency leaders noting they are bound by law to enforce the Obama-era health insurance rules.

Still, Cameron and other state leaders are negotiating with federal officials in hopes of coming up with a plan they can sell. Here, a look at what might be some of the sticking points:

RISK POOLS

Risk pools divide health insurance policyholders into groups mainly based on health status and how much money they are expected to cost the insurance company. Generally speaking, there must be enough healthy — and thus, inexpensive — customers in a risk pool to offset the sicker, more expensive customers.

Under the rules of the Affordable Care Act, the policies in Idaho's health insurance exchange all had the same risk pool, and all were given the same coverage.

Idaho's proposal would allow health insurance companies to sell policies that don't follow "Obamacare" rules. But the people who buy the cheaper, non-compliant policies would still be kept in the same risk pool as those who buy more the expensive "Obamacare" policies. Cameron says that's because the cheaper policies are intended to attract the healthier people needed to offset the sicker individuals with "Obamacare" policies.

RISK ADJUSTMENT PROGRAMS

These programs are designed to level the playing field for insurance companies, so companies with sicker customers can remain competitive with companies that have healthier customers.

Under the programs, the state or federal government calculates the overall financial risk a company's risk pool represents, and those companies with lower risk pay a fee to the companies with higher risks to offset the costs. Idaho's proposal doesn't currently include a risk adjustment program, but Cameron says it's something the state may have to consider.

ESSENTIAL HEALTH BENEFITS

A key component of the Affordable Care Act is the requirement that every policy cover 10 "essential health benefits," including things like maternity and newborn care, mental health and substance abuse treatment, emergency services, prescription drugs and outpatient services.

Idaho's initial plan would have allowed health insurers to skip some of those benefits for certain policies, including things like maternity care. Cameron now says the state will likely concede on that point, however, requiring that all plans cover all 10 essential health benefits.

ANNUAL CAPS

Obama's health care law prohibits insurance companies from placing annual caps on the costs a patient can insure. Idaho's plan initially would have allowed caps of $1 million a year per individual. Cameron says the annual cap option will now likely be lifted from Idaho's proposal.