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Legal defense of Idaho's proposed health plans hinges on single phrase in ACA

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Legal defense of Idaho's proposed health plans hinges on single phrase in ACA

The legal justification for Idaho's new health plans that sidestep Affordable Care Act rules relies on a reading of a specific phrase in the health law, according to a letter reviewed by S&P Global Market Intelligence.

In a letter to Secretary of Health and Human Services Alex Azar, Blue Cross of Idaho Health Service Inc.'s legal counsel, Anthony Shelley, argued the insurer's plans are legal based on an interpretation of what it means to "substantially enforce" the ACA. HHS did not immediately respond to a request for comment on the letter.

The law states that if a state fails "to substantially enforce" the ACA's provisions, the federal regulator will step in. Shelley wrote that Idaho's dual-plan proposal, in which an insurer could offer plans with less coverage than the ACA requires as long as the insurer's other plans still comply with the law, does "substantially" enforce the ACA.

The proposal allows insurers to consider pre-existing conditions to underwrite plans and flout other ACA rules as long as the company offers at least one plan that is fully ACA-compliant on the state's exchange.

"This enforcement provision is most reasonably read as affording the States discretion to relax some ACA provisions' application, where they view it as necessary," Shelley wrote. "That is, by using the terminology 'substantially enforce,' Congress implicitly left leeway for a State to decide sometimes not to enforce."

Earlier in the year, Idaho Gov. C. L. "Butch" Otter, a Republican, directed Insurance Director Dean Cameron to devise a proposal allowing insurers to offer plans that give consumers less coverage for the minimum set of benefits defined by the ACA as a way to combat rising premiums in Idaho.

The letter, sent to Azar on Feb. 22, preceded a meeting between Otter and Azar in Washington, D.C. At the meeting, Otter used the same reasoning to defend his department and Blue Cross of Idaho to Azar, Modern Healthcare reported.

Blue Cross of Idaho has not yet received a green light to sell the plans from Cameron's office, nor has it heard from Azar about the letter, a spokesperson told S&P Global Market Intelligence.