The head of President Trump’s Centers for Medicare and Medicaid Services says state efforts to save their individual major markets still have to comply within the Affordable Care Act.
Seema Verma, the CMS administrator, delivered that message in a letter rejecting an Idaho effort to allow the sale of “State-Based Health Benefit Plans,” or limited-benefit major medical plans that allow for medical underwriting.
The ACA “is failing to deliver quality health care options to the American people and has damaged health insurance markets across the nation, including Idaho’s,” Verma writes.
But the ACA “remains the law, and we have a duty to enforce and uphold the law,” Verma writes.
CMS is the arm of the U.S. Department of Health and Human Services that handles HHS efforts to oversee the ACA rules and programs that affect commercial health insurance.
A copy of Verma’s letter is available here.
The Idaho Proposal
The ACA system now requires issuers of new individual major medical coverage to cover at least about 60% of the value of a standardized essential health benefits (EHB) package, and to cover EHB services without any annual or lifetime benefits caps.
The ACA system forbids issuers from considering personal health factors other than location when deciding whether to issue individual coverage. The ACA prohibits issuers from considering personal health factors other than age, location and tobacco use when pricing new individual coverage.
Idaho proposed, in Bulletin Number 18-01, to let a carrier that offers at least one ACA-compliant plan through the Idaho ACA public exchange sell a non-ACA individual policy outside the exchange system.
An Idaho plan policy would have to cover most of the services in the EHB, but it could:
- Have an annual benefits limit as low as $1 million per enrollee.
- Make maternity care benefits optional.
- Exclude children’s dental and vision coverage.
- Use information about a consumer’s health status, such as information about ADHD, arthritis or allergies, when pricing the coverage.
An Idaho plan policy issuer could charge the highest-risk applicants up to four times as much as it was charging the lowest-risk applicants.
How Seema Verma Reads the ACA
The current ACA regulations require CMS to enforce the ACA underwriting and benefits rules in a state that declines to enforce those rules, Verma writes in her letter.
Idaho has 30 days to show whether it’s actually in compliance with the ACA, Verma writes.
If Idaho cannot show that it’s in compliance, and it declines to begin enforcing the ACA standards, then CMS will have enforce the ACA standards in Idaho, Verma writes.
Short-term health insurance policies, or “short-term, limited-duration plans,” fall outside ACA major medical underwriting and benefits package requirements.
Obama administration officials tried to keep short-term health policies from competing with individual major medical policies, by limiting the benefits period for a short-term policy to 90 days. The Trump administration recently proposed eliminating the 90-day cap.
Verma suggested that Idaho might be able to tweak the Idaho plan proposal and offer the plans through the proposed short-term health insurance policy framework.
— Read CMS Nominee Backs Patient Choice at Senate Hearing on ThinkAdvisor.