idaho legislature

Idaho Legislators Appear Skeptical of PUC-Based Health Insurance

By Sharon Fisher, 8-27-09

What do gas, water, electricity, telephone service, and health care have in common?

Right now, nothing. But if a Boise State University professor has his way, health insurance in Idaho could also be regulated by a public utilities commission (PUC), which the professor said could result in better service for less money.

The concept isn’t new; Dr. Uwe Reischl, a health sciences professor, has been working with organizations such as Idaho Health Care for All for a couple of years now, describing the concept.

However, the legislators in Idaho’s health care task force interim committee, which heard about the proposal yesterday, expressed concern about several aspects of the plan—with some saying it didn’t go far enough.

Under the proposal, insurance companies would still be able to make a certain amount of profit, as PUC-regulated companies such as Idaho Power do. It would be Idaho-specific and cover the entire state. Premiums could drop by up to 35 percent, due to economies of scale and reduced administration costs, which currently are about 15 to 20 percent for insurance companies and 10 to 15 percent for health care providers. There would be no exclusion for pre-existing conditions, and people could see any doctor they wished. The plan might also provide for higher reimbursements for medical services.

Residents would not be required to buy into the proposal—Reischl is “politically astute” enough to know that would be untenable, said Senator Dean Cameron, co-chair of the committee, as well as of the Joint Finance-Appropriations Committee—but private companies would not be allowed to sell health insurance in the state. “Competition in the insurance market is detrimental to efficiency,” Reischl said. “It requires the majority of subscribers to be healthy.” If multiple companies are competing for a limited risk pool, it would require either reducing services or increasing premiums, he said.

Premiums could be so low, Reischl said, that it would be cheaper for Medicaid to purchase the premiums for families that couldn’t afford them, which would reduce the burden on Medicaid—a state-funded program that currently costs more than a billion dollars per year.

While Senator Joe Stegner, R-Lewiston, said it was an “intriguing concept,” he wondered how the plan would deal with multi-state corporations with self-regulated plans. “This is where I would need your input,” Reischl said, presumably referring to legislation.

Several other members of the committee also criticized the proposal. Cameron—who owns an insurance business—was skeptical about whether Reischl’s numbers would pencil out. Representative John Rusche, D-Lewiston, a physician, was not sure whether the population of Idaho that would be covered—after multistate corporations and Medicaid and Medicare recipients were accounted for—would be sufficient to fund the proposal. “You’d probably be left with less than half the population of the state,” he said.

And Representative Fred Wood, R-Burley, a physician and medical director, said the proposal didn’t go far enough. “It’s just another idea to fix the financing of health care,” rather than fixing the delivery of it, he said. “Reforming financing is the first step in reforming delivery,” Reischl replied, noting that it was dictated by the way services are reimbursed. Wood said they would have to “agree to disagree” whether it would eventually lead to a reform of the system.

Other issues the committee discussed included a plan to reform funding of adult cystic fibrosis care without turning Idaho into a “Mecca for cystic fibrosis patients” and yet at the same time not condemning those patients to death; a way to continue funding childhood immunizations after January 31, when $2.1 million that Governor C.L. “Butch” Otter allocated after a recommendation from the committee’s previous meeting runs out; and funding amino acid-based formulas for various medical conditions more common in children that make it more difficult for them to digest certain foods.

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