Trump health chief faces an early test on enforcing ObamaCare

President Trump’s new health secretary, Alex Azar, is facing an early test of his willingness to enforce the Affordable Care Act.

The governor of Idaho moved last week to allow insurers in the state to sell plans that do not meet several ObamaCare requirements, including ones that deal with pre-existing conditions.

Democrats and other observers call that a clear violation of federal law. They say the Department of Health and Human Services (HHS) has an obligation to step in and stop the plans from being sold.

But such a move from the Trump administration would be politically tricky, as it would mean overruling a Republican governor to enforce ObamaCare’s rules.

“Hundreds of years of American law would say that states can’t ignore federal law,” said Sam Berger, a former Obama administration health official now at the liberal Center for American Progress, stressing that HHS has a duty to enforce the law.

“I would be surprised if the HHS secretary in his first few days violated his oath of office,” he added.

Azar was sworn into office on Monday. HHS indicated in a statement that it would conduct a review of Idaho’s move.

“While we have not conducted a formal review of Idaho’s new guidelines, the state’s approach does need to be evaluated,” an HHS spokesperson said. “HHS is committed to fulfilling its obligations under the law and will continue to work with states to provide flexibility where possible.”

Idaho argues that the changes are needed to bring down high premiums under ObamaCare and bring more healthy people into the market. It says the new plans will be cheaper.

The new plans would be able charge people with pre-existing conditions higher premiums, something not allowed under ObamaCare. And while most of the requirements for which health services a plan must cover would remain, not all plans would have to cover certain services, like maternity care, that are required under ObamaCare.

Dean Cameron, Idaho’s insurance commissioner, acknowledged that the proposal is “up against the edge of the boundary lines” of legality. But he pointed to the Obama administration’s move to allow people to keep their old health insurance plans that did not follow ObamaCare rules, known as “grandfathered plans,” as a precedent. He also said with the repeal of the individual mandate, there is no longer a penalty for not having an ObamaCare-compliant plan.

He said his state’s market is “in need of an infusion of healthy people,” which spurred the move to allow cheaper plans.

Federal officials from a division of HHS that oversees ObamaCare, the Center for Consumer Information and Insurance Oversight, held a conference call with state officials after the governor signed the executive order earlier this month, Cameron said.

But he said that conversation did not focus on the legality of the move, and instead was a more general discussion of the proposal.

Since the specifics of Idaho’s proposal came out in guidance last week, Cameron said he had not had any contact from federal officials.

“We don’t believe that we are outside of our legal authority and they certainly haven’t indicated that we are,” Cameron said.

The top four Democrats on the committees overseeing health care, Reps. Frank Pallone Jr. (N.J.) and Richard Neal (Mass.) and Sens. Ron Wyden (Ore.) and Patty Murray (Wash.), wrote to HHS this week asking for any legal determination the administration has made on Idaho’s move by Feb. 20. 

“Idaho’s guidelines appear to violate Federal law that requires policies sold on individual insurance markets comply with certain consumer protections, such as the prohibition of discrimination against individuals with pre-existing conditions,” the Democrats write.

Azar, at a confirmation hearing in November, pledged to enforce the law, including ObamaCare, as secretary and more broadly expressed his willingness to work across the aisle.

“If I’m confirmed as secretary, my job is to faithfully implement the programs as passed by Congress, whatever they are, and that would include, if the Affordable Care Act is the law of the land and remains such, to implement it as faithfully as possible,” Azar told Congress.

Democrats think Idaho’s move is also problematic on policy grounds, saying it will actually cause premiums to increase for ObamaCare plans if healthy people move into new plans lacking consumer protections.

Some health insurers are considering offering the new plans, despite the risk that they could incur fines or be sued. Cameron said he expects that at least one insurer will take up the offer in the next “30 to 60 days.”

Charlene Maher, president and CEO of Blue Cross of Idaho, said in a statement that the company is still “reviewing the guidance” but believes it “will provide uninsured middle-class families in Idaho with choices in health insurance at a price that fits their budget and meets their needs.”