The Centers for Medicare and Medicaid (CMS) yesterday stepped in to void Idaho’s attempt to sell health insurance policies that do not meet the standards of the Affordable Care Act (ACA).
CMS Administrator Seema Verma sent a letter to Idaho Gov. C.L. “Butch” Otter, a Republican, and Idaho Department of Insurance Director Dean Cameron saying that the ACA remains the law and that her agency has a duty to enforce it.
Enforcement, she wrote, could force her agency to void the state insurance department of its power to regulate and fine insurance companies $100 per day for each individual covered under a non-ACA policy.
Though blocking the state’s attempt to market less expensive policies, Verma voiced sympathy for the effort. “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. She noted that rates in Idaho, post-ACA, have risen 91 percent.
Verma also suggested that, “with certain modifications,” Idaho’s proposal might be acceptable. saying the state could meaningfully implement many of the same goals legally through short-term, limited-duration plans. The administration recently issued a proposed rule looking to expand such plans and allow consumers to buy short-term plans for a full year rather than the current limit of three months.
Separately, at a health insurance conference, Health and Human Services (HHS) Secretary Alex Azar voiced support for alternative health plans.
“More broadly, we are committed to using the flexibilities we have within the law to allow insurers to offer competitive products that work for consumers,” Azar said. “We know the layers of regulation imposed by the Affordable Care Act have made this almost impossible. Consistent with the law, we want to work with you to open up new affordable and flexible options.”
The state plans announced in February were allowed to exclude pre-existing conditions for up to 12 months unless the insured could prove continuous prior coverage. The plans could also cap services at $1 million, and could have different out-of-pocket maximums for different services — one for prescriptions, another for doctors’ visits and still another for hospitalizations. They could also exclude some of the ACA’s essential health benefits, such as maternity and newborn care.
Idaho Department of Insurance Cameron said the move was necessary to make cheaper plans available to more people. Otherwise, he said he feared the state’s individual health insurance marketplace would eventually collapse as healthy residents chose to go uninsured rather than pay for expensive plans that comply with the federal law.