The state of Idaho appears to be violating federal law by proposing the sale of insurance plans that do not comply with Obamacare’s strictures, top Democrats said Wednesday, pressing the Trump administration to either justify the proposal or intervene.
Idaho says it is tired of waiting for Republicans in Congress to extend cheaper insurance options to young and healthy consumers, so it is embracing President Trump’s invitation to innovate at the state level.
In a recent bulletin, Idaho opened the door to cheaper plans that offer a narrower set of benefits than what Obamacare mandates, excluding things like pediatric oral and vision care or maternity services.
Insurers could charge sicker people more than healthier ones, or lock people with pre-existing conditions out for a up to a year if they didn’t hold continuous coverage — proposals that flout the 2010 Affordable Care Act.
Idaho said insurers would still have to offer plans that comply with Obamacare’s rules on the exchanges, so people can access subsidies.
Democrats said the plan is a startling violation of protections enshrined in their prized health care law, so Health and Human Services Secretary Alex Azar should intervene as one of his first acts on the job.
Much of the Obamacare law remains intact, after the GOP failed to fulfill its pledge to repeal and replace it.
Analysts say that offering cheaper plans outside of the program’s framework could siphon off healthier customers in the individual market, raising prices for those who rely on robust coverage in the exchanges.
“The State of Idaho’s new guidelines eviscerate critical protections that are enshrined in federal law and have the potential to destabilize the health insurance market and raise premiums for thousands of consumers and families in the State of Idaho,” House and Senate Democrats on health and tax-writing committees wrote to HHS. “Consumers in so-called ‘state-based plans’ will lose access to coverage for critical services, and these plans will drive up costs for people who purchase insurance that satisfies Federal consumer protections, harming those who need health care most.”
Mr. Trump did not reissue calls to replace Obamacare in his State of the Union Address late Tuesday, though he did tout repeal of its “individual mandate” requiring Americans to hold insurance or pay a tax.
Repeal of the mandate opened the door to Idaho’s plan, according to Gov. C.L. “Butch” Otter, a Republican who said it means “we will no longer be penalized for buying coverage that doesn’t meet all the Obamacare rules.”
“We have been waiting patiently while Congress has been unable to find a solution and Idaho families have been forced to buy products that are too expensive and loaded with benefits they don’t want or need,” he said earlier this month. “Now the door is open for states to pursue our own reasonable solutions.”
It’s unclear whether insurers will take the state up on its offer, particularly if the plans themselves would be exposed to legal challenges and fines.
Analysts said the proposal poses a big test for Mr. Azar, who was sworn as HHS secretary earlier this week.
“This bulletin allows plans that are in pretty clear violation of the ACA’s rules,” said Larry Levitt, senior vice president at the Kaiser Family Foundation. “The ACA requires HHS to enforce insurance rules in a state if the state is not doing so.”
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