The Trump administration has rejected a health insurance initiative by Idaho that some saw as an affordable model for challenging the dominance of Obamacare.
“Taking no action is a time bomb,” @LtGovBradLittle says.
Idaho leaders traveled to Washington this week to meet with Trump administration officials and make their case for the policy.
Idaho sought to offer cheaper, less comprehensive options in its health insurance exchange, alongside Obamacare plans that require more costly coverage of pre-existing conditions.
The goal was to incentivize young and healthy residents to buy into the health insurance marketplace.
But in a letter last week to Idaho officials, Seema Verma, administrator of the agency that oversees Obamacare, said the state policy doesn’t comply with the federal health care law.
“We sincerely appreciate your dedication to the people of idaho and your efforts to address the damage caused by the PPACA,” Verma wrote March 8, referring to the Obamacare law by the acronym for its formal name, the Patient Protection and Affordable Care Act.
But, she said, the Affordable Care Act “remains the law and we have a duty to enforce and uphold the law.”
Verma, administrator of the Centers for Medicare & Medicaid Services, added in her letter to Idaho Gov. Butch Otter and Idaho Insurance Director Dean Cameron:
[W]e have reason to believe that Idaho may not be substantially enforcing provisions of the PPACA. If a state fails to substantially enforce the law, the Centers for Medicare & Medicaid Services (CMS) has a responsibility to enforce these provisions on behalf of the state.
Otter and Lt. Gov. Brad Little, both Republicans, co-signed an executive order in January directing the state’s Department of Insurance to seek creative ways to make health coverage more affordable. The department projected that allowing insurers to sell no-frills plans on the Your Health Idaho exchange could reduce health insurance costs in the state by 30 to 50 percent.
The Centers for Medicare & Medicaid Services didn’t issue a categorical rejection to the state, but it was a bureaucratic response, Little said.
“The young and healthy are electing not to have insurance because the costs have gone from [the size of] a car payment to a house payment,” the lieutenant governor told The Daily Signal in a phone interview. “The problem is that taking no action is a time bomb. As the population gets older and we don’t have young and healthy people coming in, it’s a time bomb.”
Little said 70,000 Idaho residents dropped their health insurance when they faced doubled premium payments in the past three years.
Little, Cameron, and Sen. Jim Risch, R-Idaho, met Wednesday with Verma and White House advisers to help clarify Idaho’s policy.
“I extend great credit to Lt. Gov. Brad Little and Director Cameron for setting this meeting up,” Risch said in a public statement Thursday. “They are truly trying to move Idaho to a more affordable and adequate health care system. I really believe that after this meeting the administration has a much clearer picture of what Idaho is attempting to do and will help us get there.”
Both the Obama administration and the Trump administration allowed states to use transitional “mini-med” plans, and Idaho’s alternative insurance plans are more comprehensive and closer to being compliant with the 2010 health care overhaul, said Cameron, the state’s insurance director.
“The letter [from Verma] was premature on multiple fronts,” Cameron told The Daily Signal in an email. “It was premature because the Idaho Department of Insurance has not acted, we have not approved any plan that is not compliant. At this point, we have only approved plans that meet the ACA [Affordable Care Act] guidelines.”
The next step for Idaho is responding to Verma’s letter and demonstrating that the state is substantially enforcing the law, while also reviewing the federal agency’s concerns, Cameron said.
Whoever wrote the letter for Verma did not “understand, consider or even acknowledge Idaho’s submitted information and the legal arguments posed,” the state’s insurance director said. “It feels like the letter was already developed before our submissions.”
“Finally,” Cameron said, “the letter was premature because CMS continues to push us toward short-term plans [for which] a proposed rule has been issued but is not yet finalized.”
Four Democrats in Congress—Sens. Ron Wyden of Oregon and Patty Murray of Washington and Reps. Frank Pallone of New Jersey and Richard Neal of Massachusetts—took aim at the Idaho policy in a Feb. 22 letter to Cameron.
“We strongly oppose efforts that result in higher costs and undermine consumer protections that are guaranteed by federal law that protect women, people with pre-existing conditions, and others facing discrimination in access to health care, and therefore request an explanation of how the Idaho Department of Insurance will regulate insurance plans being sold in the individual market that are not compliant with federal law,” the four Democrats wrote.
Wyden, Murray, Pallone, and Neal are, respectively, the ranking members of the Senate Finance Committee, the Senate Health Education, Labor and Pensions Committee, the House Energy and Commerce Committee, and the House Ways and Means Committee.
The concerns raised by the lawmakers demonstrate a lack of understanding, Cameron said.
“They live under the false illusion there is nothing wrong or that additional federal funding will solve the systemic failures of the ACA. The systemic features which are driving the healthy away,” Cameron told The Daily Signal in the email.
“They fail to recognize the need to restore the overall risk pool,” he said of the Democrat lawmakers. “Left unresolved, the individual market will collapse. We are seeing it played out in many states, not just Idaho.”
The U.S. Department of Health and Human Services, which includes the Centers for Medicare & Medicaid Services, announced a proposed regulation to extend the availability of short-term, limited duration health insurance plans to allow consumers to have the plans for up to one year.
An HHS spokeswoman declined to comment to The Daily Signal beyond the wording of Verma’s letter on Idaho, but she noted the short-term plans as an example of action by the Trump administration to cut costs for consumers.
A group of conservatives, including former Sen. Rick Santorum of Pennsylvania, wrote an open letter to Congress in early January seeking more flexibility for states to address the higher costs and fewer choices under Obamacare.
Marie Fishpaw, director of domestic policy studies at The Heritage Foundation, was among those signing the letter.
“The administration is doing what it can to help Idaho achieve its goals within existing law,” Fishpaw told The Daily Signal. “However, the situation shows Congress needs to come back to finish its work on repealing and replacing Obamacare. Under the emerging conservative consensus plan, Idaho would have the freedom to create those plans for citizens.”
Little, Idaho’s lieutenant governor, said he was surprised by the development, particularly after two of Trump’s executive orders last year.
In January, Trump directed the executive branch to “exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the [Affordable Care] Act that would impose a fiscal burden on any state” or individuals.
In October, another executive order allowed small businesses to form associations, making it easier to buy insurance plans across state lines. It also mandated a review of “short-term” plans.