Congressional Democrats eye HHS' response to Idaho ACA insurance plans

Leading congressional Democrats, worried about Idaho's plan to break with Affordable Care Act regulations on its state exchange, warned HHS on Wednesday that they are watching how the Trump administration plans to uphold the Affordable Care Act statute.

Early in January, Idaho officials made the first step to test the limits of the Trump administration's dislike of the ACA when Republican Gov. Butch Otter asked via executive order for "creative" options to expand choice on the exchanges. Idaho's insurance commissioner in response put out guidelines asking insurers to come up with cheaper alternatives to the current, ACA-compliant plans to offer on the individual market exchange.

Insurers could get out of some of the ACA's rules, the insurance department director Dean Cameron said, as long as they also offered ACA-compliant options too.

Idaho's move clearly violates federal law, legal experts say. Democrats fear the move could politically jeopardize the ACA's signature promise that people with pre-existing conditions can receive the same insurance protections as everyone else, at the same price.

Idaho's guidance could let plans do away with protections for sick people, as well as the current caps on out-of-pocket expenses. They could exclude the ACA's "essential health benefits" that include maternity coverage, mental health care and emergency care.

"Idaho's guidelines appear to violate federal law that requires policies sold on individual insurance markets comply with certain consumer protections, such as the prohibition of discrimination against individuals with pre-existing conditions," the Democratic lawmakers write.

The letter to HHS Secretary Alex Azar and CMS Administrator Seema Verma from ranking members of the Senate finance and health committees Sens. Ron Wyden (D-Ore.) and Patty Murray (D-Wash.) and of the House Ways & Means and Energy & Commerce committees Reps. Richard Neale (D-Mass.) and Frank Pallone (D-N.J.).

Their letter signals potential conflict between congressional Democrats, who want to uphold the coverage safeguards of current law but who have scant oversight power, and President Donald Trump's HHS.

Verma since her confirmation has given states leeway to ratchet back Medicaid expansion enrollment. Azar, who just stepped into the top post at HHS this week, has wide berth to interpret the ACA. Trump has already worked to reshape the individual market through executive order.

Health law consultant Chris Condeluci said the question all comes down to HHS enforcement.

"At the end of the day, Idaho can do whatever it wants," Condeluci said. "Who it's putting at risk is the carriers selling non-compliant plans. That risk is, will HHS impose penalties? If they don't, then Idaho can do whatever it wants to do. If HHS does enforce the law, the carriers suffer."

The Democratic lawmakers are also covering their bases in case HHS and Idaho coordinated as the state forged ahead with its plan. The letter requests how HHS would enforce the ACA, including through regulators and insurance companies, and the lawmakers also want all communications between the federal agencies, Idaho officials in the insurance department and the governor's office.

Democrats also asked whether carriers of non-compliant plans will participate in the federal risk adjustment program if they don't follow other individual market rules.

Despite the potential legal consequences of its plan, Idaho moved on quickly to set its own rules for the exchanges once the GOP tax bill eliminated the individual mandate penalty — which frees people up to buy any insurance plan they want without paying a fine.

Early in January, Gov. Otter directed the state's insurance department to "seek creative options which will expand Idahoans' access to insurance and approve plans meeting state requirements even if not all requirements of the Patient Protection and Affordable Care Act are met, so long as the carrier proposing such a plan also offers exchange-certified plans."

Cameron responded with guidance last week and defended the move as necessary to bring more healthy people into the individual market.

"There are other states that have been talking about it, but we may be out in front," Cameron said. "They may look to follow us should be we successful."