Ignoring Obamacare, Idaho’s ‘freedom’ plans come with limits

After Idaho’s Republican governor promised to find creative ways to get around Obamacare, one health plan in the state plans to offer skimpy coverage that may violate many of the law’s protections for patients.

Blue Cross of Idaho said Wednesday that it will offer insurance plans that don’t comply with some Affordable Care Act requirements. The “Freedom Blue” coverage is a way to give some people lower premiums upfront in exchange for less comprehensive coverage.

Others will pay more — the plans have limits on annual medical spending and will charge sicker people higher premiums or deny them coverage in some cases. Those policies are specifically forbidden by the 2010 law.

The move sets up a potential conflict with the federal government. While President Donald Trump has said he opposes the law and has taken steps to undermine it, the administration will have to decide whether to enforce legal requirements that remain on the books.

Trump’s Secretary of Health and Human Services, Alex Azar, was asked about the Idaho plans during a congressional hearing on Wednesday in Washington. He said he’d uphold the law, without indicating what specific actions he might take.

“There are rules and there’s a rule of law that we need to enforce,” Azar said at the hearing. An HHS spokesman said the department was monitoring the situation in Idaho.

If the department doesn’t act, it could be up to the courts to resolve whether Idaho is violating the law.

“Both in terms of federal penalties and in terms of potential private lawsuits, they are taking on tremendous liabilities here,” said Tim Jost, an emeritus professor at the Washington and Lee University School of Law who has been critical of efforts to unwind the law. “What they’re doing is completely illegal. It’s kind of jaw-dropping.”

In early January, Idaho Gov. Butch Otter directed the state’s insurance regulator to find “creative ways” for health insurers in the state to offer more affordable coverage. Otter said the state planned to use flexibility offered by the Trump administration in an executive order, and that it had authority to do so. The insurance regulator issued guidelines for the plans later that month.

“The door is open for states to pursue our own reasonable solutions,” Otter said.