Federal officials say Idaho’s move to let companies offer health insurance plans that don’t meet Affordable Care Act standards is illegal.
But Idaho authorities disagreed with that interpretation Friday, saying they believe a letter from Centers for Medicare and Medicaid Services Administrator Seema Verma was encouragement to pursue some form of the plans.
Verma wrote Idaho Gov. Butch Otter and Idaho Department of Insurance Director Dean Cameron on Thursday, reminding officials that the Patient Protection and Affordable Care Act remains the law and that CMS has a duty to enforce that law.
Otter, Cameron and Lt. Gov. Brad Little announced earlier this year that they would begin allowing insurers to offer plans that don’t meet all ACA regulations, such as by charging people more based on their health history, or by not covering some health needs like maternity care. Insurers also could require patients to foot a much larger share of their total medical costs than they would have to under ACA plans.
Blue Cross of Idaho was the first insurer to respond, submitting five proposed plans in mid-February for state approval. Idaho insurance regulators were expected to take at least a month to review those plans.
Otter, Cameron and Little on Friday afternoon issued this joint statement about the CMS letter:
“Contrary to news media interpretations, the letter from CMS Administrator Verma was not a rejection of our approach to providing more affordable health insurance options for the people of Idaho. Her letter made it clear that Idaho’s efforts to pursue innovative alternatives hold great promise, and we believe that Idaho’s plan aligns with the state’s responsibility for ‘substantially enforcing’ Obamacare. In fact, we consider the letter an invitation from CMS to continue discussing the specifics of what can and cannot be included in state-based plans. We will consider all possible options and then continue discussions with CMS and HHS on how best to achieve our shared goals of reducing the costs of coverage and stabilizing our health insurance market.”
Blue Cross officials had not issued a response as of Friday afternoon.
Cameron spoke about the letter Thursday afternoon to the Statesman, saying that he hadn’t been able to read it yet, but had been briefed on it by his staff.
“We’ve been expecting this letter for some time ... saying, ‘Hey, you’ve got to show us how you are substantially enforcing [the law],’” Cameron said.
He noted that the Trump administration has been advocating for the use of “short-term” insurance plans as an alternative to ACA plans. But Cameron believes those plans would be worse for Idahoans than the state’s proposal.
“Granted, [short-term plans] may be an easier approach for them to legally defend, but it won’t be for us,” he said.
Unlike Idaho’s state-based plans, the short-term plans could kick people off coverage every year, wouldn’t be as good for newborn care, wouldn’t be tied into the overall insurance market and would allow “a worse pre-existing [condition] clause than what we were proposing,” Cameron told the Statesman. “So, it does the things that people were concerned about with our plan. It bifurcates the market, it pulls the healthy away from the ACA. ... Those are the heartburns we have.”
Those comments are consistent with Cameron’s statements to federal health officials in emails obtained by the Idaho Statesman, in which he describes Idaho’s state-based idea as “more comprehensive ... and better for consumers than the short-term plans.”
The emails also show that Otter’s administration began giving federal health officials details about its idea for state-based plans in March 2017.
Verma said her agency was sympathetic to Idaho officials’ concerns, and said President Trump is “committed to doing everything in his power to increase competition, choice, and access to lower-priced, high-quality health care options for all Americans.”
“As you know, the Patient Protection and Affordable Care Act (PPACA) is failing to deliver quality health care options to the American people and has damaged health insurance markets across the nation, including Idaho’s,” Verma wrote, noting that premium rates for coverage through the Idaho health insurance exchange have increased by more than 91 percent from 2014 to 2018, while insurance companies continue to incur losses.
Verma also outlined some options that she believes Idaho could legally take under a recently proposed federal rule. That rule would expand the availability of short-term, limited duration health insurance by allowing consumers to buy short-term plans that would cover them for just under a year.
She said that with some modifications, the noncompliant plans could be turned into short-term plans for customers.
The letter listed eight areas in which the U.S. Department of Health and Human Services believes Idaho’s proposed plans would fall short of federal requirements, including rules against charging customers significantly more based on their age, location or history, rules against discriminating against people with pre-existing medical conditions and rules prohibiting lifetime and annual coverage caps.
Other areas where Verma said the state-based plans fell short included failing to cover all “essential health benefits” required under the ACA and failing to include preventive services such as immunizations or some health screening tests.
The state and Blue Cross had argued that certain language in the Affordable Care Act gave states leeway to “relax” some aspects of the health care law in the pursuit of its larger goals. Idaho required the risk pools for the “state-based” plans to be merged with the pool of customers using Idaho’s state insurance exchange. Officials claimed that would prevent any negative effects on the latter — and possibly even reduce their costs.
A legal analysis drafted by lawyers for Blue Cross pointed to waivers previously approved for certain other aspects of the ACA, and argued states were only directed to “substantially enforce” the law, not fully enforce it.
Otter and Cameron met with Verma and U.S. Health and Human Services Secretary Alex Azar in late February to brief them on the plan. Shortly after that meeting, Cameron said the federal officials gave no immediate feedback on Idaho’s actions, but appeared “sympathetic” to the state’s concerns about health care costs.