(1) From and after July 1, 1990, no contract shall be issued in Idaho by an organization offering a managed care plan for which a certificate of authority is required which excludes from coverage services rendered the member while a resident in an Idaho state institution, provided the services to the member would be covered by the contract if rendered to him outside an Idaho state institution.
(2)  From and after July 1, 1990, no contract issued by an organization offering a managed care plan for which a certificate of authority is required may contain any provision denying or reducing benefits otherwise provided under the policy for the reason that the person insured is receiving health or mental health care or developmental services provided by the department of health and welfare, whether or not the department of health and welfare bases its charges for such services on the recipient’s ability to pay. Provided, nothing in this section shall prevent the issuance of a contract which excludes or reduces benefits where the charge level or amount of the charge levied by a governmental entity for such services would vary or be affected in any way by the existence of coverage under the managed care plan.