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Idaho insurance exchange projects fee hike

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Posted: Friday, October 11, 2013 1:57 am

    BOISE, Idaho (AP) — Idaho insurance exchange leaders could hike a fee on individual policies by nearly 75 percent within two years because existing assessments may be insufficient to sustain the Internet health coverage marketplace’s operations, emails show.

    The $70 million Your Health Idaho exchange’s board of directors in June set a 1.5 percent assessment on each policy to accomplish dual objectives: Raise enough money to stockpile exchange operational reserves, while fulfilling the politically critical goal of being less than the 3.5 percent fee being charged on policies sold via federal exchanges in 34 states.

    Being cheaper than Washington was a key selling point for Gov. C.L. “Butch” Otter during the 2013 Legislature when he convinced a sharply divided state House and Senate to support a state-based exchange.

    In early September, however, exchange finance chief Pat Kelly planned to tell board members the fee would likely have to be hiked to 2.6 percent by 2016, according to emails obtained by The Associated Press in a public records request.

    While such a hike would leave fees at less than those charged by federal exchanges, it would add millions of dollars to costs of policies sold via Idaho’s exchange.

    “Your Health Idaho’s assessment fee of 1.5 may not be sustainable,” according to a Sept. 5 email.

    A combination of factors makes a fee hike likely, Kelly suggested, including the costs of operations, the average cost of an insurance plan and the number of people participating.

    However, Kelly’s presentation — slated for members of the exchange’s finance committee on Sept. 6 — was canceled just hours before the meeting, other emails show.

    Interviewed Thursday, Your Health Idaho executive director Amy Dowd recalled halting Kelly’s presentation on grounds his estimate was based on preliminary calculations not yet ready for public consumption.

    “The reason we weren’t comfortable publishing 2.6 percent is, we have no clue what the number is going to be,” Dowd told the AP. “We’ve done some modeling, we’ve got some data, but as far as our comfort level, putting a number out today is not a wise decision.”

    With Kelly’s presentation now on ice, the exchange in September also scrubbed public relations efforts seeking to blunt the news of a prospective hike.

    “Let’s hold this statement in a reserve for a different time,” wrote Jody Olson, the exchange’s spokeswoman, in a Sept. 6 email. “I am breathing a sigh of relief on this statement.”

    The fees are built into premiums charged on policies offered by insurance carriers. For a policy that costs $300 monthly, for instance, it amounts to $54 annually at 1.5 percent, and $94 at 2.6 percent.

    On tens of thousands of policies likely to be sold in Idaho, however, that adds up to millions of dollars. The federal government expects state exchanges to be self-sustaining by 2016.

    Exchange treasurer Jeff Agenbroad, a Boise banker who heads the board’s finance committee, said Thursday he wasn’t aware that Kelly in September considered announcing a prospective hike to 2.6 percent, saying the concept has only been discussed informally and without specific numbers.

    Like Dowd, Agenbroad remains optimistic Idaho will run its exchange more cheaply than the federal government, even if a fee hike turns out to be necessary.

    Missing that goal would likely prompt Idaho lawmakers to again demand weighing in on a state exchange’s merits.

    “I hope we never have to ask that question,” Agenbroad said.

© 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Welcome to the discussion.

1 comment:

  • Stagester posted at 10:28 am on Mon, Oct 14, 2013.

    Stagester Posts: 1

    Is it a surprise that anytime government gets involved in a market the prices go up? What did you expect. Get rid of the exchange and repeal all the laws and regulations that don't allow insurance policies across state lines and Idaho will have the model for the lowest insurance costs in the country.

     

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