How Idaho’s insurance plan would violate ACA
The Idaho Department of Insurance has announced it will allow insurers to sell plans which don’t comply with regulations established by the Affordable Care Act (ACA), which could mean the return of plans that deny coverage based on pre-existing conditions, charge higher premiums based on health status and place lifetime or annual caps on benefits.
As Vox explains, insurers in Idaho would still have to offer ACA-compliant coverage on the insurance exchanges—thus allowing customers eligible for premium subsidies to access them—if they also market these “state-based plans” off the exchange. The rule changes violate law as established by the ACA, which has led to a lukewarm reaction from Idaho insurers that don’t want to offer illegal plans.
“If a contract that includes a lifetime cap on coverage goes to court, the state courts are likely to invalidate the terms of the contract,” Nicholas Bagley, an assistant professor at the University of Michigan School of Law, told Vox. “These insurers have to be looking around and asking, can we write contracts that we can defend in court?”
These skimpier plans could also siphon off healthy customers from an insurer’s own ACA-compliant exchange plans as it splits the individual market risk pool.
The question is whether HHS Secretary Alex Azar, a frequent critic of the ACA, will use the agency’s authority to stop Idaho’s plans, like imposing fines on insurers offering the non-compliant plans.
“They seem to be making a calculation that the administration doesn’t have an interest in using political capital on a law they don’t agree with,” Bagley said.
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John joined TriMed in 2016, focusing on healthcare policy and regulation. After graduating from Columbia College Chicago, he worked at FM News Chicago and Rivet News Radio, and worked on the state government and politics beat for the Illinois Radio Network. Outside of work, you may find him adding to his never-ending graphic novel collection.