Verma to idaho: We're already handling ACA sabotage, so you don't need to bother
2019 OPEN ENROLLMENT ENDS (most states)
Time: D H M S
Five weeks ago, when Idaho Governor "Butch" Otter announced that Idaho had decided to basically just blow off federal law altogether and start offering non-ACA compliant health insurance policies on the individual market alongside the compliant versions, I wrote:
To be honest, I'm not entirely sure I understand why Idaho would do this. Yes, of course the deep red state government opposes the ACA in general and sure, they want to "lower premiums" on the individual market, but Trump's recent "ShortAss Plan" executive order would do pretty much the same thing (allowing non-ACA compliant off-exchange "Short Term/Association Plans" which amount to the same thing...without putting GOP Gov. Butch Otter's fingerprints all over the ugly stories which would soon follow if/when people started actually enrolling in these types of policies. Besides, as much as Idaho claims to hate the ACA, they seem to be quite proud (and rightly so) of their own state-based ACA exchange, Your Health Idaho.
Well, it sounds like CMS Administrator Seema Verma was thinking along the same lines, because this unexpected story broke a few hours ago: Verma sent a letter to Otter and his state Insurance Commissioner shooting down their "state-based plans" idea as being flat-out illegal.
She starts out by, naturally enough, utterly trashing the ACA overall:
Dear Governor Otter and Director Cameron:
As you know, the Patient Protection and Affordable Care Act (PPACA) is failing to deliver quality health care options to the American people and has damaged health insurance markets across the nation, including Idaho's. Most Idahoans who did not receive federal premium subsidies have been exposed to large premium rate increases since 2014. In fact, premium rates for coverage sold through the Exchange in Idaho have increased by 91.4 percent from 2014 to 2018.
Let me stop there for a moment and note that unlike last year's ASPE analysis, Verma is at the very least using 2014 (the first year ACA-compliant policies were actually sold) as her premium baseline.
Of course, it's also worth noting that exchange-based premiums in Idaho in 2017 averaged $426/month. For 2018, it's true that average premiums did spike a further 27%, which should mean an average 2018 premium of around $541/month, which in turn means that the average in 2014 should have been around $283/month.
HOWEVER...fully 19 percentage points of that was due specifically to Verma's boss, Donald Trump, cutting off CSR reimbursement payments last fall. In other words, without Trump's cutting off CSR payments, 2018 premiums would be averaging around $460/month...only 63% higher than in 2014, not 91%. Don't get me wrong, I'm not saying that a 63% hike is anything to brag about either, but this still means that nearly 1/3 of the total premium increase over the past 4 years is due specifically to Trump monkeying around with the individual market. Just something to keep in mind.
Additionally, Idaho health insurance issuers have been incurring significant losses in the individual market since 2014 - collectively over $300 million since 2014. As demonstrated by his October 12, 2017 Executive Order, "Presidential Executive Order Promoting Healthcare Choice and Competition Across the United States," the President is committed to doing everything in his power to increase competition, choice, and access to lower-priced, high-quality health care options for all Americans. A key component of that effort is providing states with as much flexibility as possible under the law to address the unique needs of their health insurance markets.
Actually, as I just demonstrated, "the President" has done everything in his power to increase prices and reduce competition for high-quality healthcare options (remember, quite a few carriers specifically noted the threat to CSR payments and repeal of the individual mandate as the entire reason they dropped out of the market last year).
We sincerely appreciate your dedication to the people ofldaho and your efforts to address the damage caused by the PP ACA. This Administration recognizes and supports the fundamental role states play in regulating insurance. We further recognize that states face unique challenges in repairing the individual health insurance market and we are committed to working with states to provide flexibility to do so.
However, the PPACA remains the law and we have a duty to enforce and uphold the law.
Based on our review of Idaho Bulletin No. 18-01, Provisions for Health Carriers Submitting State-Based Health Benefit Plans, we have reason to believe that Idaho may not be substantially enforcing provisions of the PP ACA. If a state fails to substantially enforce the law, the Centers for Medicare & Medicaid Services (CMS) has a responsibility to enforce these provisions on behalf of the State. This is certainly not our preference; we believe that Idaho has options within the law to meaningfully implement many of the policy proposals contained in the Bulletin, to address the crisis facing the state's individual health insurance market. I outline a few of those options below.
In other words, "we wish we could just ignore the fact that you're flat-out violating federal law, but dammit, at least one department in the Trump Administration has to kind of, sort of follow the rule of law. Those are the breaks.
Most of the rest of the letter goes into the minute details of the ACA and what HHS's regulatory authority does and doesn't allow. Towards the end, however, Verma tells Otter not to be too down in the mouth about the whole thing, because...
On February 21 , 2018, in response to the President's Executive Order, the Departments of HHS, Labor, and the Treasury published a proposed rule that would expand the availability of shortterm, limited-duration health insurance by allowing consumers to buy these plans with health coverage for any period of less than 12 months, rather than the current maximum period of less than three months.
Notwithstanding our concerns regarding the Bulletin's inconsistency with the Part A market requirements, we believe that, with certain modifications, these state-based plans could be legally offered under the PHS Act exception for short-term, limited-duration plans. I encourage you to continue to engage in a dialogue with my staff regarding this and other potential options.
I hope that we will continue to work together to explore ways in which Idaho may achieve its policy goals with respect to State-based plans while retaining its role as the primary enforcer of the Part A market requirements. I look forward to working closely with you and your staff on these matters, as well as on other ways we can support Idaho's efforts to repair its health insurance markets, including with respect to the state's section 1115 demonstration waiver and section 1332 state innovation waiver applications.
In other words...exactly what I said over a month ago: Idaho doesn't have to break the law, because Trump and Verma are already planning on doing everything in their power to bend it just beneath the point of breaking anyway.