Thursday , February 15, 2018 - 9:00 AM
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Alex Azar is facing his first big Affordable Care Act test in his new role as Health and Human Services secretary: Will he enforce the ACA even as some Republicans try to duck its requirements?
If Azar cracks down on Idaho for its recent bold and unprecedented move to sidestep ACA insurance regulations, he’ll send the message that the law of the land comes first - even if he privately supports efforts by Congress to repeal the ACA. But if the new secretary shrugs off Idaho’s actions, it could embolden more GOP-led states to thumb their noses at the health-care law and let off the hook more insurers from its consumer protections.
It was unclear yesterday, however, exactly what approach Azar would take as he faced questions in a congressional hearing about how he’ll respond to Idaho, a state whose Republican governor, C.L. “Butch” Otter, announced last month that insurers can sell non-ACA-compliant plans.
Asked about the Idaho move during a House Ways and Means Committee hearing, Azar said that “there are rules and there’s a rule of law that we need to enforce.”
But Azar also didn’t indicate that he has issued warnings to the state. “I’m not aware that our opinions or views have been solicited,” he told lawmakers.
ThinkProgress’s Amanda Michelle Gomez tweeted a response from Azar’s new department:
“HHS spokesperson just emailed me the following re Idaho: ‘We are continuing to monitor the situation in Idaho. HHS is committed to working with states to give them the flexibility to provide their citizens the best possible access to healthcare, within the bounds of the law.‘”
On Wednesday, Blue Cross of Idaho became the first insurer to take Otter up on the offer, announcing it would sell five “Freedom Blue” plans that include limits on annual medical spending and charge higher premiums to people with preexisting medical conditions - all policies that are specifically prohibited under the ACA.
Indeed, there’s little dispute among experts that Idaho is violating the text of the ACA and some of its key tenets to make insurance coverage more comprehensive. A major part of the health-care law is requiring that individual market plans cover 10 categories of “essential health benefits” and ensuring that people with preexisting conditions don’t have to pay higher monthly premiums than healthy people.
“It is, I think, a clear-cut violation of the Affordable Care Act,” Joel Ario, who directed the Office of Health Insurance Exchanges under the Obama administration, told me.
Andy Slavitt, former Centers for Medicare and Medicaid Services administrator under Obama Tweeted:
“This not only violates what Congress passed, but it violates the needs of American families.”
So, what could the Centers for Medicare and Medicaid Services do to enforce the law? If the agency determines Idaho has failed substantially to enforce part of the ACA, it could wield a pretty big stick by fining the plans $100 per day for every customer, which could add up to $36,500 per year.
There are possible legal ramifications, too. Plans ducking the ACA face the risk of lawsuits from patients who buy noncompliant coverage only to later realize their plan doesn’t cover certain mandated benefits that they might need.
Given those possible risks, it could seem surprising that any state would give insurers such license. But if CMS doesn’t take a firm stance in the Idaho situation, it’s possible to imagine other Republican-led states following suit, especially those that have resisted other elements of the ACA such as its Medicaid expansion.
Expect states and insurers to be carefully watching Azar’s moves in the coming weeks as they start thinking about the marketplaces for 2019. Marketplace insurers are working on setting rates for next year, and in a few months they’ll need to start submitting plans to the administration for approval.
“I do suspect if Idaho goes forward and approves the plans and they’re actually sold - and there isn’t any consequence against them - I do think you’ll see other states take a closer look at that strategy,” Ario said.
Just look at how more than a half dozen states legalized recreational use of marijuana under the lenient Obama-era policy that kept federal authorities from enforcing a federal ban against it. A similar domino effect could occur with health plans - once one state shows it’s possible to duck the ACA, other states might try to do the same, said Nicholas Bagley, a professor at the University of Michigan Law School.
“I think Azar has got to be worried that, if Idaho presses ahead, other states will follow,” Bagley told me.” Once they know the cop is off the beat, why wouldn’t they?”
To justify their actions, Otter and Blue Cross have both pointed to rising insurance premiums on Idaho’s individual market as reasons they’re ignoring parts of the ACA. Idaho officials said the aim is to allow these cheaper plans to be sold off the state’s marketplace to attract younger and healthier consumers.
Yesterday, Idaho Blue Cross CEO Charlene Maher said Idaho’s marketplace “isn’t affordable” for middle-class families. “Our new state-based plans are a response to Gov. Otter’s executive order, which begins to solve the issues that have kept middle-class Idahoans from buying health insurance,” she said in a statement.
Idaho’s move is also raising the ire of many health-care advocates and stakeholders who had bristled at Republican efforts in Congress to repeal some of the ACA’s insurance requirements but then breathed easier when those efforts dramatically failed. Now, they have to worry about whether the Trump administration will enforce a law that remains on the books.
A group of 15 medical associations wrote to Azar yesterday, urging him to ensure plans would continue providing the full range of benefits required under the ACA and maintain its consumer protections.
“We urge you to make clear that Idaho cannot authorize the issuance of health insurance coverage that violates federal law, and that any insurer that issues such plans risks enforcement action and serious penalties,” says the letter, signed by the Cancer Action Network, the American Heart Association and the American Lung Association, among others.
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