Democratic Health Leaders Demand Explanation on Idaho’s Illegal Junk Plans
Members question Idaho Department of Insurance on move to allow plans that ignore federal law and consumer protections
Proposed plans would illegally charge higher premiums for older and sicker patients
(Washington, D.C.) –Yesterday, U.S. Senator Patty Murray (D-WA), Ranking Member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, Senator Ron Wyden (D-OR), Ranking Member of the Senate Finance Committee, Congressman Frank Pallone Jr. (D-NJ), Ranking Member of the House Committee on Energy and Commerce, and Congressman Richard Neal (D-MA), Ranking Member of the House Committee on Ways and Means, sent a letter to Dean Cameron, Director of the Idaho Department of Insurance, questioning the Department’s bulletin permitting plans which flout federal law and fail to provide required consumer protections.
“Last month, the Idaho Department of Insurance issued a bulletin permitting the sale of “state-based plans” that do not satisfy consumer protections required of individual market insurance coverage under federal law. We request an explanation of how the Idaho Department of Insurance plans to regulate insurance plans being sold in the individual market that are not compliant with federal law,” wrote the four Democratic health leaders. “We strongly oppose efforts that result in higher costs and undermine consumer protections that are guaranteed in Federal law that protect women, people with pre-existing conditions, and others facing discrimination in access to health care… The proposed plans would charge higher premiums for older and sicker patients in ways that are prohibited under federal law, which permits variation in premiums based only on family size, geography, age, and tobacco use. Blue Cross of Idaho’s application for these “state-based plans” seeks information about a potential enrollee’s medical history, ranging from reproductive health conditions to a history of mental illness and substance use, and the insurer would be permitted to charge enrollees more based on their responses. The plans can deny coverage for those with pre-existing conditions who have not had continuous coverage. The plans would also include annual limits on coverage, and at least one plan would not cover critical essential health benefits like maternity care.”
The Members also released the response they received to a previous letter on this issue they sent to Health and Human Services (HHS) Secretary Alex Azar and Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma. In that letter, the Members expressed their concern about the potential for Idaho plans to skirt federal law and requested information about what legal justifications for Idaho’s decision were considered.
Full letter below and a PDF can be found HERE.
The previous letter the Members sent to HHS and CMS on January 31st, 2018 to express their concern and request information can be found HERE, and the response from CMS to that letter can be found HERE.
February 22, 2018
Mr. Dean Cameron
Director
Idaho Department of Insurance
700 West State Street, 3rd Floor
P.O. Box 83720
Boise, Idaho 83720
Dear Director Cameron:
Last month, the Idaho Department of Insurance issued a bulletin permitting the sale of “state-based plans” that do not satisfy consumer protections required of individual market insurance coverage under federal law.[1] We request an explanation of how the Idaho Department of Insurance plans to regulate insurance plans being sold in the individual market that are not compliant with federal law.
We strongly oppose efforts that result in higher costs and undermine consumer protections that are guaranteed in Federal law that protect women, people with pre-existing conditions, and others facing discrimination in access to health care. Idaho state officials have reportedly discussed the concept of these “state based plans” with federal regulators at the U.S. Department of Health and Human Services (HHS), including with former Secretary Tom Price.[2]
On Tuesday, Blue Cross of Idaho requested state regulatory approval to begin marketing five of these “state-based plans,” which it hopes to begin selling in early March for coverage to begin in April. The proposed plans would charge higher premiums for older and sicker patients in ways that are prohibited under federal law, which permits variation in premiums based only on family size, geography, age, and tobacco use.[3] Blue Cross of Idaho’s application for these “state-based plans” seeks information about a potential enrollee’s medical history, ranging from reproductive health conditions to a history of mental illness and substance use, and the insurer would be permitted to charge enrollees more based on their responses.[4] The plans can deny coverage for those with pre-existing conditions who have not had continuous coverage.[5] The plans would also include annual limits on coverage, and at least one plan would not cover critical essential health benefits like maternity care.
Other Idaho insurers have so far declined to apply to sell these state-based plans, citing concerns that the guidance contained in the Idaho Department of Insurance’s bulletin conflicts with federal regulations. Carriers that violate the Public Health Service Act are subject to a penalty of up to $100 per day for each individual that receives coverage that fails to comply with Federal law. The Public Health Service Act requires the federal government to step in if a state is not “substantially enforcing” Federal insurance law.
Those insurers also raised concerns about the impact of these plans on the single risk pool in Idaho’s individual insurance market and the potential to introduce “unnecessary uncertainty into the market.”[6]
We request a staff briefing in order to understand how the Idaho Department of Insurance plans to regulate these “state-based plans” and to address the resultant effects on the individual insurance market. Please also provide the following documents and responses by no later than February ##, 2018:
- Please provide any analysis conducted by or provided to the Idaho Department of Insurance to evaluate the sale of “state-based plans” and compliance with requirements under federal law that require plans sold on the individual insurance market comply with certain consumer protections, such as the prohibition of discrimination against individuals with pre-existing conditions.
- Please provide any analysis conducted by the Idaho Department of Insurance to evaluate the effects the new guidelines may have on coverage and market stability in the State of Idaho.
- Please provide all communications between the Idaho Department of Insurance and HHS officials, including officials at CMS and CCIIO, in which the new guidelines or approval of “state-based plans” were discussed or mentioned. Such communications should include, but not be limited to, emails, letters, faxes, or any other written materials, as well as a list of any meetings, calls, or other oral communications that took place between the aforementioned parties. In the case of meetings, calls, and other oral communications, please include the date, time, and location at which such communications took place, as well as a list of individuals who participated.
- Do you believe that the State of Idaho is still substantially enforcing Federal insurance law?
- The civil monetary penalty for health plans in violation of federal law is $100 per member per day. Please provide any analysis conducted by the Idaho Department of Insurance to evaluate the reserves of Blue Cross of Idaho and its ability to absorb these penalties and remain in compliance with state law.
Thank you in advance for your attention to this critical matter. If you have any questions or would like to discuss further compliance with this request, please contact Elizabeth Letter or Colin Goldfinch with Senator Murray’s HELP Committee Staff at 202-224-0767.
Sincerely,
Patty Murray
Ranking Member
Senate Health, Education, Labor, and Pensions Committee
Ron Wyden
Ranking Member
Senate Finance Committee
Frank Pallone, Jr.
Ranking Member
House Committee on Energy and Commerce,
Richard E. Neal
Ranking Member
House Committee on Ways and Means
###
