Idaho officials will allow insurers in the state to sell health plans that don’t comply with rules set up under ObamaCare — a move that could test how committed the Trump administration is to enforcing the law.
Under the new guidelines, insurers will be allowed to offer “state-based plans” to consumers that won’t be required to meet some of the basic rules of ObamaCare plans, such as the essential health benefits that plans must cover.
That means insurers who participate are free to deny people coverage or charge more based on a customer’s medical history, a practice that’s illegal under ObamaCare.
Under the new guidelines, insurers will be able to deny coverage for people with pre-existing conditions for up to 12 months, unless the customer had continuous prior coverage.
Insurers will still be required to cover maternity, newborn and mental health coverage through at least one plan. But other plans can exclude those benefits. State-based plans also won’t be required to cover pediatric dental or vision care.
According to the state, insurers will only be allowed to offer state-based plans if they also offer plans on the state’s ObamaCare exchange.
Since they would be exempt from many of ObamaCare’s rules, the state-based plans will likely be cheaper and more attractive to younger, healthier people.
State officials argue that the state needed to take action to allow for cheaper plans that would help attract younger, healthier people back into an ailing market.
However, experts think this will likely mean steep premium increases for middle-class individuals with pre-existing conditions, while healthy middle-class individuals who earn too much for ObamaCare subsidies will benefit.
State officials said they are trying to move forward with the changes on their own without any action from Washington, seeking to give people cheaper options.
Earlier this month, Gov. Butch Otter (R) signed the executive order that would allow insurers to sell ObamaCare-exempt plans. Otter argued that because Congress repealed ObamaCare’s individual mandate, states are free to allow skimpier insurance plans to be sold because people will no longer be penalized for lacking coverage that meets all ObamaCare requirements.
But experts are dubious that the state’s new rules are legal. ObamaCare is still the law of the land, and its essential health benefits can’t be waived.
“These Idaho guidelines for health insurers are crazypants illegal,” Nicholas Bagley, a law professor at the University of Michigan, said in a tweet. “Does Idaho think the Supremacy Clause doesn’t apply to it?”
It’s the job of the Department of Health and Human Services (HHS) to enforce the law, but there are questions as to whether the Trump-led agency will do that.
The administration has made no secret of its disdain for ObamaCare and has been working to gut it after Republicans in Congress were unable to repeal the law in its entirety.
“States have no obligation to enforce [ObamaCare], but if they fail to do so, HHS must,” Timothy Jost, a law professor emeritus at Washington and Lee University, said in an e-mail.
Jost noted the fine for insurers that don’t comply is up to $100 a day per violation. But even if HHS doesn’t enforce the law, Jost said insurers would be taking a huge risk if they offered state-based plans.
“Insurers that would offer this coverage would also be open to lawsuits by enrollees if they attempted to deny coverage guaranteed by federal law,” Jost wrote. “Insurers would be foolish to take on the potential liability they would face if they offer this coverage.”