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5 Things About Idaho's Attempt to Circumvent the ACA

Laura Joszt
Idaho tested the Trump administration's willingness to provide flexibility to states on the health insurance options they offer. CMS has ruled that Idaho cannot sell health plans that do not meet the requirements of the Affordable Care Act (ACA).
Republicans and the Trump administration have been slowly rolling back aspects of the Affordable Care Act (ACA) through actions—such as repealing the individual mandate and extending the life of short-term health plans to a full year—but the limits of the Trump administration’s willingness to afford flexibility to states was tested by Idaho’s decision to allow health insurers to sell plans that did not comply with the ACA's requirements.

The Trump administration decided on Friday that it would not allow Idaho to sell health plans that don’t meet the required consumer protections of the ACA.

Here are 5 facts about Idaho’s attempt to sell these plans.

1. Idaho Attempted to Sell Non-ACA Compliant Plans

At the beginning of 2018, Idaho decided to take advantage of the fact that the Trump administration has been very open to providing states with more flexibility to implement the ACA, and that Congress had just repealed the law’s individual mandate. Republican Governor Butch Otter signed an executive order that directed the state’s Department of Insurance to allow health plans to offer coverage that did not meet coverage requirements under the ACA.

Otter argued that the elimination of the individual mandate meant that Americans could no longer be penalized for buying coverage that didn’t meet the ACA’s rules.

“Now the door is open for states to pursue our own reasonable solutions. We believe Idaho will lead the way in states taking back control of their insurance markets,” he said in a statement.

2. Blue Cross of Idaho Unveiled 5 Plans

After Otter loosened the rules for health plan coverage, Blue Cross of Idaho unveiled 5 new health plans that did not comply with the ACA’s regulations. The Freedom Blue plans allow residents to choose the benefits they want for a cost that is up to 50% less than ACA-qualified plans.

The plans include annual limits of $1 million per person, and any customers who exceed the limit would be enrolled into an ACA-compliant plan. One plan won’t cover maternity care.

3. Patient Groups Argued Against Idaho’s Move

More than a dozen patient groups reached out to HHS Secretary Alex Azar and urged him to reject Idaho’s plan to sell non-ACA compliant health plans. In a letter, the organizations argued that the state’s action would hurt Idaho’s patients and “significantly destabilize Idaho’s entire health insurance market.”

They also noted that the sale of these “bare-bones plans” could increase medical debt and uncompensated care.

4. The Decision Shows the Administration’s Limit on State Waivers

Although the Trump administration has been very open to allowing states more flexibility in implementing healthcare changes, such as work requirements in Medicaid, CMS put Idaho on notice that it cannot sell the proposed non-compliant plans or risk the government stepping in.

In a letter to Otter, CMS Administrator Seema Verma said that the ACA “remains the law and we have a duty to enforce and uphold the law,” and that if CMS believes a state is not substantially enforcing the law, it can enforce the provisions on behalf of the state.

5. CMS Suggests Idaho Take Advantage of Short-Term Health Plans

In her letter, Verma pointed toward a recent change by the Trump administration that Idaho can use to provide relief for its residents. The administration proposed extending the time period that Americans can stay in short-term, limited-duration plans to a full 12 months. These plans do not have to follow ACA regulations, and under the Obama administration, the life of these plans had been shortened to 3 months with the intention that they would be used by people between jobs or other sources of insurance coverage.

“…we believe that, with certain modifications, these state-based plans could be legally offered under the [Public Health Service] Act exception for short-term, limited-duration plans,” Verma wrote to Otter.

 
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