Idaho’s wild, unprecedented, and possibly illegal Obamacare experiment suddenly got very real this week.
You might remember from Sarah’s overview last month: Idaho has told health insurers that they can sell plans that do not comply with the Affordable Care Act’s regulations — those are the rules that prevent plans from discriminating against people with preexisting medical conditions and that require them to cover certain essential health benefits.
It was a brash move and a radical challenge to the health care law’s stability: Republicans in Congress might have failed to repeal it, but here were GOP state officials looking to circumvent the law in a fundamental way all on their own.
Idaho’s proposal seemed patently illegal, given that Obamacare is still the law of the land. But the Trump administration is a wild card. Sarah had two questions last month: What would HHS do and what would the health insurers do?
We got one-and-a-half answers this week.
At least one major health insurer will take up Idaho’s offer
This week, Blue Cross of Idaho submitted five “Freedom Blue” plans that it wants to sell in the state but would not comply with the ACA’s regulations. The insurer will also continue to sell plans on the Obamacare marketplace, for the record.
According to this great breakdown from Katie Keith at Health Affairs, the average premium for these “freedom” plans would be 25 to 50 percent lower than the insurer’s Obamacare plans. But there are some pretty big differences, Keith says, between ACA coverage and these new Idaho plans:
- Customers could be charged up to 50 percent higher premiums based on their or their family’s medical history; the ACA has famously prohibited insurers from charging different customers different rates based on their health status
- Customers could be denied benefits for preexisting conditions unless they maintained continuous coverage; again, the ACA forbids this
- Caps are back: These new “freedom” plans have annual limits of $1 million in benefits, which are outlawed under the ACA; there are also specific dollar caps for certain services, such as physical therapy
”These benefit, cost-sharing, and rating changes are designed to make Freedom Blue plans more attractive to healthier, younger individuals who can pass medical underwriting,” Keith wrote. “This will have the effect of leaving sicker, older individuals to the ACA-compliant market, resulting in higher premiums for those purchasing coverage through the marketplace.”
In other words: the Idaho proposal will bring back the pre-Obamacare market, which will likely hurt the people left behind in the ACA exchanges.
The Trump administration is ducking questions about Idaho for now
Our new HHS secretary, Alex Azar, testified before the Senate Finance Committee on Thursday and got grilled by Democrats about the situation in Idaho.
He ... didn’t give much of an answer. “I don’t want to be prematurely involved,” Azar told Sen. Ron Wyden (D-OR), according to the Wall Street Journal.
Azar said HHS had not actually received a waiver request from Idaho to permit the non-Obamacare plans. He did appear empathetic, at the least, about why Idaho was doing what it’s doing. From the WSJ:
Mr. Azar said the decision last month by the Idaho Department of Insurance to let insurers offer consumer plans that could charge higher premium rates to people with pre-existing conditions was a sign that too many people can’t afford coverage under the ACA.
“What we’re seeing here is a cry for help,” Mr. Azar said. Idaho officials have said they made the change to provide lower-cost options for consumers because of increases in ACA plan premiums.
Keith argued in Health Affairs, however, that Azar didn’t need a request from Idaho in order to step in. Federal law already appears to give him the authority to intervene.
”Given this authority, the widespread news coverage of Idaho’s approach, and a letter yesterday from patient advocates, HHS Secretary Alex Azar has more than enough grounds to initiate an investigation into whether the DOI is substantially enforcing the ACA,” she wrote. “If the DOI is not doing so, HHS is obligated under federal law and its own regulations to step in and do so.”
This limbo can’t last forever. Lawsuits are likely. At stake is nothing less than a state’s ability to fundamentally gut the core of Obamacare, with or without congressional authority to do so.
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