Idaho officials on Friday said a federal letter that rebuffed their plan to implement a workaround of Obamacare is actually an “invitation” to keep talking about ways to offer cheaper health insurance.
Seema Verma, administrator at the Centers for Medicare and Medicaid Services, warned Idaho Republican Gov. C.L. “Butch” Otter late Thursday that if his state offered plans that stray from the Affordable Care Act’s strict coverage requirements, she’d have to intervene.
Mr. Otter and Idaho Insurance Director Dean Cameron said they’re reviewing the letter, yet refuse to give up, saying they can tweak the plan in a way that passes legal muster.
“If I couldn’t imagine a scenario, we wouldn’t keep trying,” Mr. Cameron said in a phone interview. “We were hoping the [CMS] letter would be a little more specific, but that’s OK. They gave us a number of points we need to work on.”
Blue Cross of Idaho submitted plans that impose annual limits on claims and would charge sicker enrollees more, in some cases — two things barred by the Affordable Care Act. Some plans wouldn’t cover things mandated by the 2010 law, like maternity care.
Ms. Verma said she sympathizes with Idaho’s effort to extend cheaper options outside of the Obamacare exchanges, but they’re going too far.
Idaho officials plan to respond to CMS within 30 days and launch a series of discussions with federal officials on how to proceed.
Ms. Verma signaled that Idaho would be able to implement its plan under President Trump’s bid to let insurers sell short-term plans for a full year, instead of just three months. Under the proposal, these plans wouldn’t have to comply with Obamacare’s strict coverage guidelines.
Mr. Cameron looked askance at that approach, saying the state’s plan would retain more protections for consumers.
For instance, Idaho insurers who offer skinnier plans would have to offer Obamacare-compliant plans on the exchange, too, so they don’t “cherry-pick” the healthiest customers.
The Idaho plans would offer broader coverage than Mr. Trump’s short-term plans, he said, and insurers could only tack a surcharge on people with preexisting conditions if they’d experienced a gap in coverage.
“We have some heartburn and concerns about the short-term plans,” Mr. Cameron said. “We are still going to forge ahead with our approach.”
Earlier this year, Mr. Otter invited insurers to submit 2019 plans that didn’t comport with Obamacare, saying he was sick of waiting on Congress to offer cheaper alternatives for middle-class consumers who were priced out of the market.
Blue Cross of Idaho was the only insurer to take them up on the offer. Customers who purchased the plans wouldn’t be able to qualify for taxpayer subsidies, since they’d be offered outside the exchange.
The plan made national news, because lawmakers and analysts saw it as a key test of how far red states could test the limits of President Obama’s law under Mr. Trump, after Republicans failed to repeal it.
Ms. Verma said she appreciated Mr. Otter’s attempt to address soaring costs, especially for people who don’t qualify for income-based assistance under Obamacare.
However, Obamacare “remains the law and we have a duty to enforce and uphold the law,” she wrote.
Democrats said the administration’s decision fell short, since Mr. Trump still wants to hack away at their prized program through short-term plans.