Addressing the collapse of the individual market in two counties

Two counties will have no individual insurance carrier in 2018, based on the applications of plans to the OIC:  Klickitat and Grays Harbor Counties.

About 3,346 individuals are at risk of losing insurance. From one report:

There are 1,119 people in Klickitat County and 2,227 in Grays Harbor County who were enrolled in the individual market as of March, according to the commissioner. Every single one of them is now at risk of losing health care in 2018.

Washington law says if no insurer is available, people can still be covered through the state’s high risk pool. It’s not a qualified exchange, however, and subsidies would not be available, meaning someone with cancer would have to foot the entire bill for their treatment.

Kreidler is going to personally reach out to insurance companies to cover the two counties.

“It’s an unacceptable situation, so I’m going to certainly see if I can prevail with the insurers to come back,” Kreidler. “Failing that, I’d certainly be entertaining whether there is anything that could be done on a more expedited basis working with the state legislature.

Kreidler is the kind of person that could pull a rabbit out of a hat here and get a carrier to participate in these counties. The high risk pool, which has been largely dormant since 2014, isn’t really the right policy pathway for these otherwise healthy individuals. They just need a standard health plan product to purchase, rather than something designed for extremely high cost individuals, like the high risk pool.

Moreover, this is the kind of thing that the legislature could take on as well.

Following the example of legislation in Nevada, here is the outline of legislation that could address the potential collapse of the individual market in certain Washington State counties.

  1. Allow individuals to buy into the Medicaid benefit that were not otherwise eligible.  This would be about $300 per member per month (an amount representing the composite premium paid to MCOs by the state across all lines of current eligibility), though probably less (once you take out the BD population, the composite rate drops significantly).
  2. This would be available in counties where commercial carriers had opted to not provide insurance coverage.  If the individual market functioned smoothly, then this allowance wouldn’t need to apply.  But if the individual market collapsed, and the Medicaid market continued to function comparatively well, then this would be a smooth alternative.
  3. Direct the HCA to work with the OIC and the Exchange, but make clear that authority to take this action rests with the HCA.  This would include the development of an expedited waiver to be submitted to CMS by October 1.  This is normally a short timeline, but this wouldn’t take a tremendous amount of work.  And, this expedited effort would allow for individuals the best chance of maintaining coverage on Jan 1, when their current plan expires.

Now, I can already hear opponents complaining this wouldn’t work.  They’d say the following:

  1. This erodes the commercial market, already tenuous.
  2. This expands an already bad payer, Medicaid.
  3. This doesn’t provide for subsidies, as the exchange would, and therefore wouldn’t have the same level of coverage as currently exists.

I’d respond to these three points this way.

  1. The commercial market in these counties will have already collapsed, necessitating a different kind of thinking to provide a coverage option to the thousands of Washingtonians potentially in harms way.
  2. In these rural counties, most providers in Medicaid are cost-based.  So, Medicaid is a good payer there, generally, in that it pays a cumulative amount theoretically equal to the cost of providing care to Medicaid beneficiaries.  It’s not quite this straightforward, but it is generally this simple:  Medicaid is a good payer in rural markets.
  3. I agree: this plan wouldn’t be as great as the ACA subsidies.  Perhaps the state should include that request in its waiver – to draw down from the feds an equal amount of subsidies that would otherwise be provided via an exchange mechanism.  That’s similar in logic to Alaska’s 1332 waiver. But that might be step two.  Step one would be simply providing an option to individuals in these counties so that they could have coverage that is relatively affordable (compared to commercial premiums).  For the thousands of folks with no individual coverage option, we should not allow perfect to become the enemy of the good.

The bill in Nevada was 4 pages long.  This bill could be drafted in Washington with about the same number of pages.  If commercial carriers are leaving the market, as they have signaled they will do, this would be a straightforward way to help Washington residents in the meantime.