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Testimony before the Idaho House Health and Welfare Committee

February 26, 2018

In this testimony before the Idaho House Health and Welfare Committee, Charlie Katebi argues in favor of expanding access to affordable health insurance and reforming Medicaid to serve the truly needy.

Testimony before the Idaho House Health and Welfare Committee
Charlie Katebi, State Government Relations Manager,
The Heartland Institute
Monday, February 26, 2018

Chairman Wood and Members of the Committee:

Thank you for offering me the opportunity to testify today. My name is Charlie Katebi, and I am a state government relations manager for the Heartland Institute, a 34-year old independent national think tank. Our mission is to develop and promote public policy solutions that expand opportunity and empower people. The Heartland Institute is headquartered in Illinois and focuses on providing national, state, and local elected officials with reliable and timely analysis on important policy issues.

The legislation before this committee offers an enormous opportunity to expand access to high quality and affordable healthcare for families in Idaho. Over the last five years, the cost of health insurance in the private individual market has nearly tripled for the average person.

The cost of public insurance has also increased. Since 2000, Idaho's Medicaid program has grown from just $600 million in annual costs to over $2 billion in 2017. Medicaid now consumes nearly 27 cents of every dollar Idaho spends out of its budget. That’s less money to maintain your roads, educate your children and enforce the law.

This bill addresses the skyrocketing costs in both Idaho's public and private insurance systems. The primary reason why the individual insurance market is so unaffordable is because Obamacare forces insurers to increase premiums astronomically on the young and healthy.

This bill would remove these harmful regulations which will lower premiums on young people, encourage them to enroll in coverage, and allow insurers to reduce premiums on everyone else.

Now it’s been argued that these legislative changes are unnecessary because Governor Otter has already implemented them through an Executive Order to the Department of Insurance. But the changes the Governor has championed would be entirely unwound the moment a new governor steps in who disagrees with his reforms. This bill would codify his important reforms into Idaho law and ensure families can access affordable coverage.

This legislation also addresses the rising costs in Idaho’s Medicaid program by refocusing the program on serving the truly needy. Even though Idaho wisely rejected Obamacare’s Medicaid expansion, the program still keeps many able-bodied parents in dependency, and subsequently traps their children in poverty.  According to the Census Bureau, 52 percent of able-bodied adults on Medicaid do not work at all. And only 16 percent work full time throughout the year.

This bill takes the lessons we learned from reforming TANF and would establish time limits and work requirements on able-bodied parents to ensure they return to work and participate in Idaho's growing economy. When Kansas established an expectation of work for food stamp recipients, not only did people leave the program, they thrived. After one year of work, these individuals saw their incomes double. And after four years, their incomes increased 247 percent.

Given Idaho’s strong job growth, able-bodied parents would likely see even higher economic gains as they exit Medicaid.

But the most important changes to Medicaid is this bill’s direct primary care initiative. This new approach to delivering primary care offers patients an alternative to the fee-for-service system and instead pays physicians a flat monthly fee that dramatically reduces health care costs and improves patient health.

In 2015, a county in North Carolina partnered with a direct primary care network to care for county employees. After just one year, workers that enrolled in direct care spent 23 percent less than those who stayed with conventional physicians.

And this innovative model works especially well for patients with costly medical conditions. A case study by the DPC network called Paladina Health found that chronically ill patients who use direct primary care cost 30 percent less than individuals who use traditional doctors. They spend less on prescription drugs, outpatient care, and emergency room visits. These savings would free-up enormous resources to maintain Idaho’s roads, build schools, and other critical responsibilities.

In conclusion, the reforms outlined in this bill would provide crucial benefits to the people of Idaho. It would create affordable health coverage, reduce welfare dependency, and establish a robust, direct primary care option for vulnerable families on Medicaid.

Thank you for the opportunity to testify on this important issue.

 

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For more information about The Heartland Institute’s work, please visit our websites at www.heartland.org and http:/news.heartland.org, or call Charlie Katebi at 978-855-2992 or reach him by email at ckatebi@heartland.org.