For years, Republicans in Congress promised they would get rid of Obamacare. We’re still waiting. Now it’s looking more and more like pressure and concrete action from the states might just accomplish with D.C. politicians wouldn’t.
In January, Idaho Gov. Butch Otter and Lt. Gov. Brad Little signed an executive order authorizing insurance companies doing business in the state to offer less costly plans that do not comply with all of the Obamacare mandates and requirements. Little said the executive order “effectively ends Obamacare for many Idahoans.” I went even further, arguing that the move would take a big step toward nullifying the unconstitutional Affordable Care Act in the state. Not a lot of people seem to disagree with this assessment.
But the big question was whether or not insurance companies would step up and actually offer plans in defiance of Obamacare regulations.
The answer to the question appears to be yes.
According to a Fox News report, Blue Cross of Idaho plans to begin offering new Obamacare non-compliant options as early as April.
“What Idahoans want is a stable, functional market,” Blue Cross of Idaho CEO Charlene Maher, said in a statement. “The current marketplace is not affordable for middle-class families. … Our Freedom Blue plans bring more choices and lower prices to consumers.”
Under the new rules outlined by Idaho Department of Insurance Director Dean Cameron in January, insurers can now cap their own costs at $1 million a year per individual and can charge customers separate out-of-pocket maximums for different services. insurers can also offer plans that deny coverage for pre-existing conditions for up to 12 months unless the customer had continuous prior coverage. Insurers will no longer be required to cover pediatric dental or vision care. Although they must offer at least one plan with maternity and newborn coverage, other plans can exclude those benefits. Under the new rules, insurance carriers can also charge people more for these stripped-down plans based on where they live, their health history and their age.
These noncompliant plans will not qualify for any Obamacare subsidies. Any company doing business in Idaho still must offer ACA compliant policies.
In effect, the Idaho Department of Insurance has simply stopped enforcing certain aspects of Obamacare. It will no longer penalize carriers for offering plans that don’t comply with federal law – as long as they comply with state law. This would leave enforcement of ACA mandates completely in the hands of the federal government.
It remains unclear if the feds will challenge Idaho’s move. According to an email written by the insurance commissioner, there is concern that the federal Centers for Medicare and Medicaid Services could penalize insurance providers as much as $100 per insured, per day for noncompliant plans. Whether the agency could effectively investigate, impose and collect this fine with its limited resources and no state cooperation remains questionable. Blue Cross of Idaho is apparently willing to take that chance.
In fact, the Trump Administration may not even want to challenge the state’s move. There are some indications that it will not. Little told Fox News he doubts anyone other than Department of Health and Human Services has legal standing to challenge the policy, and that such a move by the Trump administration seems unlikely, given the federal government is also moving to offer more low-cost plans.
Officials in other states are reportedly watching with interest. South Dakota Gov. Dennis Daugaard told Fox News he likes what Idaho is doing.
“I know that prior to the ACA we had a lot of different health products available in the marketplace. And I think the national government, through the ACA, tried to set some minimal standards. In some ways, that’s good for the consumers, but in other ways it limits choice. So, if Idaho is trying to provide more choice points that provide less coverage for less cost, again if it’s another item on the menu that consumers can choose with awareness, then I see that as a good thing.”
If other states follow Idaho’s lead, it will become even more difficult for the federal government to impose its will. We’ve seen a similar dynamic unfold with marijuana legalization. As more and more states simply ignore federal prohibition, federal enforcement actions become less viable. They simply lack the personnel and resources. The feds also don’t have the political will to crack down hard when public opinion strongly opposes them. We’ve seen this over the last few years as more and more people have embraced legalization. Would Trump really be willing to push back hard against states trying to create economically sustainable alternatives to Obamacare mandates?
Obamacare was predicated on state cooperation. By ending state actions that support the ACA and refusing to enforce any of its mandates, a state can make it nearly impossible to run Obamacare within its borders. The federal government never intended to run the healthcare system alone, and ultimately, it can’t do it without state help. We’ve already seen the difficulties created for the Act by the number of states that simply refused to set up exchanges for the federal government.
“The federal government can barely manage running a website,” Tenth Amendment Center Executive Director Michael Boldin said.
This follows James Madison’s advice for states and individuals in Federalist #46. He advised a “refusal to cooperate with officers of the Union” when states engage in unwarrantable acts.
Judge Andrew Napolitano noted that if a number of states were to refuse to participate with the ACA in a wholesale fashion, that multi-state action would “gut Obamacare.”
it will gut ObamaCare because the federal government does not have the resources or the wherewithal […] to go into each of the individual states.”
This strategy rests on a well-established legal principle known as the anti-commandeering doctrine. Simply put, the federal government cannot force states to help implement or enforce any federal act or program. The anti-commandeering doctrine is based primarily on four Supreme Court cases dating back to 1842. Printz v. U.S. serves as the cornerstone.
“We held in New York that Congress cannot compel the States to enact or enforce a federal regulatory program. Today we hold that Congress cannot circumvent that prohibition by conscripting the States’ officers directly. The Federal Government may neither issue directives requiring the States to address particular problems, nor command the States’ officers, or those of their political subdivisions, to administer or enforce a federal regulatory program. It matters not whether policy making is involved, and no case by case weighing of the burdens or benefits is necessary; such commands are fundamentally incompatible with our constitutional system of dual sovereignty.”
How all of this plays out remains to be seen. But if multiple states begin to simply ignore Obamacare, refuse to enforce it and create frameworks for better healthcare delivery within their borders, Obamacare will ultimately collapse like the house of cards it is.