How much would it cost Idaho to replicate the ACA at the state level?

With the repeal of the ACA supposedly looming next year, it's worth remembering that the ACA was based in large part on a state-level program in Massachusetts, implemented by, of course...Mitt Romney. Obviously there are a lot of differences beyond simply ramping "RomneyCare" up to the national level, but at least in terms of the "3-legged stool" of the ACA exchanges (guaranteed issue, individual mandate, subsidies to help lower income enrollees), it's essentially the same.

If the law really is repealed at the federal level, some blue states where it's working pretty well would likely switch back to their own state-level versions. In addition to Massachusetts presumably just reverting back to RomneyCare again, states like California, Washington State and Connecticut seem like likely contenders.

And then there's...Idaho.

As I noted a week or so ago, Your Health Idaho, the ID ACA exchange, issued an interestingly-worded vote of confidence press release after the election:

Your Health Idaho’s Open Enrollment Continues

BOISE, Idaho -- Your Health Idaho open enrollment continues through January 31, 2017.

Idaho established its healthcare exchange at the state level, allowing us to design, implement, and maintain the exchange with local control.

The exchange is working for Idahoans by offering choice, transparency and competition. More than 95,000 Idahoans have found health insurance coverage through Your Health Idaho, placing it second in the nation for per capita enrollments. Unlike other states, Idahoans have more choice this year than ever before with 225 certified health and dental plans.

Your Health Idaho will work with state and federal lawmakers as the future of affordable healthcare insurance is reexamined. We will continue to help Idahoans find health insurance throughout this open enrollment period and beyond.

It's the "...and beyond' part which I found noteworthy...because, as I've noted before:

I don't write about Idaho much, which is a bit surprising when you think about it because it's kind of a unique state when it comes to the ACA exchanges. Most states never set up their own exchange platform. A dozen or so set them up and are still using them. Two states (Massachusetts and Maryland) scrapped their original, failed platforms and completely overhauled them. Three states started out with their own platform but gave up when they failed, moving home to the mothership (HealthCare.Gov). One state, New Mexico, was supposed to move off of after the first couple of years, but changed their mind and is still hosted by the federal platform. Oh, and there's also Kentucky, which is scheduled to scrap their perfectly-functioning tech platform for absolutely no good reason other than the petty whim of their new Governor, Matt Bevin.

And then there's Idaho.

Idaho is unique for a couple of reasons: Not only is it the only state to start off hosted by and then move off of the federal tech platform onto it's own system, it's also the only state running it's own full exchange which hasn't expanded Medicaid as well.

Idaho is an anomaly. Unlike Kentucky, where Kynect was established under a Democratic governor, Idaho is a beet-red state with a completely Republican-controlled government which refused to implement the ACA's Medicaid expansion...and yet they also chose to establish their own state-based exchange even after the technical mess at HealthCare.Gov was cleaned up. In other words, they followed the SBM route even when there was no practical need to do so.

In fact, Idaho did so specifically for the very reason why the ACA was envisioned with state-based exchanges (rather than the federal exchange) in the first place: State's Rights, which used to be a Big Deal for the GOP as a whole, you may recall:


(BOISE) – Governor C.L. “Butch” Otter announced today that Idaho is opting for a state-based health insurance exchange under the terms of Obamacare, subject to legislative approval.

“This is not a battle of my choosing, but no one has fought harder against the mandates and overreaching federal authority of the Affordable Care Act. No one has more consistently and clearly demanded that Idaho retain the authority and flexibility to chart our own path forward. There was a judicial process for challenging Obamacare, and the presidential election was at least in part a referendum on its enactment. But despite our best efforts, the law remains in place, and almost certainly will for the foreseeable future. There will be a health insurance exchange in Idaho. The only question is who will build it.

Our options have come down to this: Do nothing and be at the federal government’s mercy in how that exchange is designed and run, or take a seat at the table and play the cards we’ve been dealt. I cannot willingly surrender a role for Idaho in determining the impact on our own citizens and businesses.

...“I take some comfort in the fact that even those disagreeing with this decision strongly believe as I do in Idaho’s ability to be more responsive and do a better job than the federal government alone of ensuring our citizens can make informed choices about their health care.

Now, I have no idea what Your Health Idaho actually meant when they promised to "continue to help Idahoans find health insurance throughout this open enrollment period and beyond". It's possbile that they're just sending out a reassuring general message and slapped some exaggeration onto the end. It's possible that they mean that they'll convert into more of a Yelp-style review/recommendation site after the ACA is repealed.

However, let's suppose, hypothetically, Idaho were to indeed keep their own version of the ACA in place going forward, with the same basic structure for the private individual market. What would that cost?

Well, the exchange itself is already in place, and unlike some state exchanges appears to be breaking even financially, so that shouldn't be an issue. They never did expand Medicaid under the ACA, so nothing should change there. They handle their own marketing (including the recent addition of banner ads on their website, I should note), so that's likely a non-issue.

So, that mainly leaves the APTC and CSR assistance currently provided by the ACA. Now, one of the major problems with the ACA at the moment is that the APTC/CSR subsidies need to be beefed up somewhat, but let's go with the current levels and see what that gives us.

  • Also as of 3/31/16, the average APTC assistance provided to those receiving it in Idaho was $265/month. Multiply that by 82,802 and you get $21.9 million, times 12 months = $263 million per year for the APTC side.
  • The CSR amount is a bit trickier. According to this CBO budget projection report from March 2015, they estimated roughly $5 billion or $9 billion in CSR spending assuming a total number of subsidied enrollees of 8 million or 15 million people. That 8/15 million refers to those receiving APTC assistance; assuming 68% of those receive CSR statewide (this would be in line with the national proportions this year), that would be roughly 5.4 or 10.2 million people.
  • $5 billion / 5.4 million = $925/person/year. $9 billion / 10.2 million = $882/person/year. Lets call it around $900 even. Multiply by 58,781 and you get $53 million per year.
  • Add the APTC and CSR up and you get a total of around $316 million per year to financially assist around 83,000 Idahoans. Beef up the enrollment number to, say, 100,000 and bump up the subsidies for each a bit and that would bring it to perhaps $400 million per year.

Now, Idaho's total population is around 1.65 million people, and the annual state budget is roughly $2.8 billion/year, so this would involve raising revenue by 14% in order to help out roughly 6% of their population.

On the other hand, they'd also save whatever taxes/fees are currently being paid into the Affordable Care Act. How would that play out? Unfortunately, I'm not sure how much of the ACA is actually funded by taxes on insurance carriers and so forth...or how that breaks out at the state level. It's conceivable that the same money currently going to the federal government would simply be paid to the state government instead, with some minor tweaks. On the other hand, it's also possible that it would blow a hole in the state budget to do so and have to be replaced by tax hikes on residents/businesses at large.