CMS to watch and wait on Idaho Blue Cross's ACA-skirting plans
- Days after Blue Cross of Idaho unveiled its intention to offer five health plans that sidestep the Affordable Care Act, HHS Secretary Alex Azar faced a barrage of questions on how the department will respond during a series of three congressional hearings on the HHS budget proposal.
- Azar told lawmakers that HHS would look at the health plans and measure them against ACA requirements once the department receives a waiver request from the insurer. But the secretary deflected pressure from House Energy & Commerce Committee Ranking Member Frank Pallone, D-N.J., to take action more immediately.
- The insurer said the new plans come in response to an executive order from Republican Gov. C.L. 'Butch' Otter directing the Idaho Department of Insurance to create guidelines granting flexibility to insurers to offer lower-cost health plans. Critics argue it is simply flouting federal law at the cost of patients.
The Blue Cross of Idaho plans, dubbed "Freedom Blue," are set to be launched in March, according to the Wall Street Journal. The plans reportedly would have premiums that vary based on customers' health, have a wider age band of five-to-one rather than the three-to-one limit under current law and would have a maximum annual payout of $1 million.
The insurer argued that the plans would cost up to 50% less than current ACA-qualified plans and would better meet the needs of the uninsured middle class.
"The current marketplace is not affordable for middle-class families. Our new state-based plans are a response to Governor Otter’s executive order, which begins to solve the issues that have kept middle-class Idahoans from buying health insurance. Our Freedom Blue plans bring more choices and lower prices to consumers," Charlene Maher, president and CEO of Blue Cross of Idaho, said in a statement.
Larry Levitt, senior vice president at the Kaiser Family Foundation, tweeted that the Idaho efforts are a brazen attempt to evade the ACA's rules. He added that the effort will create "a parallel insurance market that will siphon off healthy people with cheaper premiums," which "will inevitably lead to higher premiums in ACA-compliant plans."
Premium subsidies will protect lower-income people in Idaho and keep the insurance market stable. It's middle-class people with pre-existing conditions who will bear the brunt of higher premiums.— Larry Levitt (@larry_levitt) February 14, 2018
Pallone raised concern about HHS' lack of response to Idaho during a Wednesday hearing, saying the department is "sitting by the sidelines while Idaho clearly circumvents the law."
But Azar pushed back, saying that while HHS will fulfill its duty under the law, it won't step in until the plans are finalized.
"I cannot imagine a circumstance where we would not evaluate it for compliance against the law before offered to consumers. I do think it's appropriate to wait to see even if the state finds it in compliance with whatever their state laws are. I don't see why we would be reaching in and picking up matters out of press reports, we don't make a habit of reviewing applications to states," Azar said.
Democrats are not pleased with a vague response from CMS Administrator Seema Verma about the matter.
"At this time, the Centers for Medicare & Medicaid Services (CMS) does not have any additional information to share regarding this bulletin. We are committed to fulfilling our obligations under the law while continuing to work with states to provide flexibility where possible, and we are happy to keep you informed of any developments," Verma wrote back to Pallone Feb. 9.
Levitt argued that if Idaho does not enforce the ACA's protections, the "federal government is obligated to step in and enforce the rules," in a Wednesday tweet.
If HHS does not step in and enforce the ACA's insurance rules in Idaho, it won't just be about Idaho. Other conservative states will no doubt then start to allow insurance plans that don't comply with the ACA.— Larry Levitt (@larry_levitt) February 14, 2018
- Blue Cross of Idaho BLUE CROSS OF IDAHO RESPONDS TO GOVERNOR OTTER’S EXECUTIVE ORDER; OFFERS NEW CHOICES IN STATE-BASED HEALTH INSURANCE PLANS
- Executive Department, State of Idaho EXECUTIVE ORDER NO. 2018-02 RESTORING CHOICE IN HEALTH INSURANCE FOR IDAHOANS
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