The lawyer representing Idaho Blue Cross told the Trump administration that Idaho’s plan to sell coverage that does not abide by Obamacare’s mandates is “entirely legal.”
In a letter sent Tuesday to the Department of Health and Human Services, outside counsel Anthony Shelley wrote that Obamacare “did not contemplate [states] enforcing [the law] to a high degree or completely or rigidly,” arguing that states had some latitude to make changes to health insurance provisions.
Idaho officials have outlined a plan to offer health insurance policies that do not abide by Obamacare’s rules, which could be sold as early as April. Under the proposal, insurers could sell policies that allow certain customers to be charged more based on a pre-existing illness such as diabetes if they did not have coverage the previous year. It also wouldn’t require coverage for children’s vision or dental care, and would require only one plan to offer maternity coverage, rather than all plans, as Obamacare stipulates.
Congressional Democrats are asking HHS Secretary Alex Azar to intervene. They worry that the plan will further destabilize the marketplace for Obamacare and that people will unknowingly sign up for coverage that does not cover the same range of care obligated under Obamacare plans. They argue, further, that the state’s plan is illegal because Obamacare mandates that health insurance must include specific provisions.
Shelley, from the law firm Miller & Chevalier, outlined various reasons that the firm believes Idaho’s proposal to overhaul the individual market fits Obamacare’s requirements. He said the state was enforcing Obamacare “substantially” with its proposal and that the deterioration of the exchanges had forced Idaho to act, arguing that doing so would help further Congress’ goal of getting more people insured.
In his defense of the proposal, Shelley noted that the plans were still more generous than faith-based health sharing ministries; than short-term plans, which the Trump administration is moving to allow for nearly a year at a time; and more generous than grandmothered plans that the Obama administration continued to allow, which were plans created between 2010 and 2013, before the healthcare law took effect.
“If anything, state-based plans are more worthy of HHS’s approval than these other exceptions already permitted or proposed,” Shelley wrote.
He noted, as well, that the proposal likely would result in people enrolling in plans that are currently not in the exchange.
Idaho has presented its proposal to Azar and plans to proceed. It is reviewing the plans proposed by Idaho Blue Cross. The state maintains that it is following the law because it requires insurers that sell noncompliant plans to offer at least one that meets Obamacare’s requirements. Customers would all be in the same risk pool, not siphoned separately. Blue Cross’s letter said that would help ensure that premiums would drop for everyone.
“The alternative to Idaho’s initiative is not that those individuals now boxed out of coverage will join the individual market, for they are priced out now and are increasingly leaving it; rather, the alternative is a continuing downward spiral in the individual market’s stability as fewer, sicker individuals continue to buy insurance and more and more healthier individuals choose to go uninsured, which in industry parlance is referred to as a market ‘death spiral,'” Shelley wrote.
