The Trump administration issued a written warning to Idaho on Thursday that an audacious maneuver by the state to allow health plans that fall outside the Affordable Care Act’s insurance rules “may not be substantially enforcing” the law.
The warning, in a letter to Idaho’s governor and insurance director by the administrator of the federal Centers for Medicare and Medicaid Services (CMS), does not immediately block the state’s unique decision to encourage insurers to sell health coverage lacking some benefits required by the law, such as maternity care or certain coverage of preexisting conditions. The letter is a strong signal, however, that the Department of Health and Human Services is unwilling to allow Idaho to move forward on its own.
As the controversy surrounding Idaho’s maneuver has spread from the state to Washington, many legal and health policy experts have called the state’s move illegal.
However, in an interview early Thursday evening, Dean Cameron, Idaho’s insurance director, quickly suggested that the state is not prepared to give up.
How the administration would respond to a rebel state’s attempt to create a parallel insurance universe for individual buyers has been widely considered a significant test of HHS Secretary Alex Azar in his initial weeks on the job. The issue calls on him to balance President Trump’s — and his own — eagerness to free states and consumers from the ACA’s dictates with his avowed commitment to adhere to the law.
Asked by Democrats in Congress and journalists how he planned to respond, Azar has said repeatedly in recent weeks that he did not want to be “premature.” He said there was no reason for HHS to consider whether to step in unless Idaho insurance regulators approved such alternative health plans for sale.
In the end, though, federal officials did not wait.
Blue Cross of Idaho, the biggest insurer in the state’s ACA marketplace, has submitted five Blues Freedom plans to the state’s insurance regulators for approval. Cameron said his department was still evaluating the plans and recommending tweaks.
The four-page letter to Idaho Gov. C. L. “Butch” Otter (R) and Cameron, made public early Thursday evening, straddles the Trump administration’s antipathy for the ACA with its need to enforce the sprawling 2010 health-care law that is a path to insurance coverage for millions of Americans.
“We sincerely appreciate your dedication to the people of Idaho and your efforts to address the damage caused by the [ACA],” said the letter, signed by CMS Administrator Seema Verma. The letter said the president is eager to give states “as much flexibility as possible under the law to address the unique needs of their health insurance markets.”
But the letter then goes on to say that the ACA “remains the law, and we have a duty to enforce and uphold the law.” It says that federal officials have scrutinized new state rules written in January, shortly after Otter issued an executive order calling for alternative health plans. It gives the state 30 days to respond or the federal government will investigate further and make sure the law is carried out.
The letter suggests that “with certain modifications,” Idaho could offer individual plans that deviate from the ACA’s rules by defining them as short-term health plans. Those plans have been available as a bridge for up to three months for consumers who are between jobs or otherwise need temporary coverage. At the president’s direction, HHS has proposed a rewrite of federal rules to let the plans be sold for up to a year. Azar said in a meeting with journalists on Thursday that he would like either Congress or HHS to find a way for the short-term plans to be renewed from year to year.
In the interview with Cameron, the Idaho insurance director said he had not had a chance to read the letter or review it with the department’s attorneys, though he was familiar with it.
“We strongly disagree that we are not substantially enforcing the law,” Cameron said. “We feel it would be hard-pressed for the administration or for CMS to argue those points in a court of law.” Cameron called it “ironic” that HHS is urging Idaho to rely on new rules for short-term plans, because the “state-based plans” his department has decided to allow include stronger consumer protections.
Under the state’s rules, insurers that sell at least one health plan that meets the ACA’s rules can sell others that do not. The plans may exclude basic care such as maternity coverage and children’s vision and dental care. Insurers can charge older members more than the ACA allows, impose separate caps for prescription drug coverage and block coverage of a customer’s preexisting medical condition for a year if the individual was uninsured for 63 days beforehand. Federal subsidies could not be used for the plans.