HHS nixes state-based plan to allow non-ACA compliant health plans

The Trump administration announced this week that states cannot OK health insurance plans that don’t meet Affordable Care Act standards (Source: “US to Idaho: ‘State-based’ health plans don’t pass muster,” Associated Press, March 9, 2018)

At issue was a plan in Idaho to allow insurers to offer plans that were not compliant with the ACA, such as charging people more based on their health history, or by not covering some health needs like maternity care.

Centers for Medicare and Medicaid Services Administrator Seema Verma issued a letter to Idaho Gov. C.L. “Butch” Otter, a Republican, and Idaho Department of Insurance Director Dean Cameron saying that the Affordable Care Act remains the law and that her agency has a duty to enforce it.

In the letter, Verma said such a move would force the federal agency to enforce the provisions of the Affordable Care Act on behalf of the state. That could include pulling regulatory authority from the Idaho Department of Insurance and fining insurance companies $100 a day for every person they insure on a noncompliant plan.

Verma also outlined some options that she believes Idaho could legally take under a recently proposed federal rule. That rule would expand the availability of short-term, limited duration health insurance by allowing consumers to buy short-term plans that would cover them for just under a year. She said that with some modifications, the noncompliant plans could be turned into short-term plans for customers.