It appears the Trump administration plans to come after Idaho and try to vigorously enforce Obamacare mandates in the state. 

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. At the time, the big question was whether any insurance companies would step up to the plate and offer such plans.

At least one company has.

As we reported recently, Blue Cross of Idaho plans to begin offering new Obamacare non-compliant options as early as April.

But the Trump administration has already indicated it does not plan to let Idaho dictate its own insurance policy if it does not conform to mandates written into the Affordable Care Act. On March 8, Centers for Medicare and Medicaid Services administrator Seema Verma sent a letter to Gov. Otter and Idaho Department of Insurance Commissioner Dean Cameron saying that if the state does not enforce Obamacare requirements, the feds will.

Verma concedes that Obamacare has turned into a nightmare for average Americans.

“As you know, the Patient Protection and Affordable Care Act (PPACA) is failing to deliver quality health care options to the American people and has damaged health insurance markets across the nation, including Idaho’s. Most Idahoans who did not receive federal premium subsidies have been exposed to large premium rate increases since 2014. In fact, premium rates for coverage sold through the Exchange in Idaho have increased by 91.4% from 2014 to 2018.”

Verma went on to highlight the losses incurred by Idaho insurers since the implementation of Obamacare. But she makes it clear that despite the fact the ACA has proven a total failure, the federal government must enforce it.

“However, the PPACA remains the law and we have a duty to enforce and uphold the law.”

The letter indicates if Idaho does not enforce the Obamacare mandates, the CMS will step in and handle enforcement itself.

“If a state fails to substantially enforce the law, the Centers for Medicare & Medicaid Services (CMS) has a responsibility to enforce these provisions on behalf of the State.”

It doesn’t appear the federal government will take any action against the state of Idaho, but any insurance companies selling plans that do not comply with Obamacare will find themselves in the crosshairs. They could ultimately face substantial fines.

“If any health insurance issuer that is subject to CMS’s enforcement authority fails to comply with the PHS Act requirements, it may be subject to civil money penalties, as described in 45 C.F.R.§150.301 through§ 150.347. If CMS assumes enforcement authority in Idaho, CMS could shortly thereafter issue a cease and desist letter to any issuer who received approval from the state to offer Idaho state-based plans. If any issuer does not comply with the cease and desist letter by, for example, selling non-compliant plans in the State, CMS, as the primary enforcer, could initiate an investigation of the potential violation and based on the outcome, could impose a civil money penalty for each violation of up to $100 each day, for each responsible entity, for each individual affected by the violation, in accordance with 45 C.F .R. § 150.315.”

The state of Idaho has 30 days to respond to the letter.

Blue Cross of Idaho released a statement calling the letter “disappointing,” but said it “leaves an opening for [Otter and Cameron] to craft a solution to provide access to individual health insurance.”

The letter raises a couple of questions.

First, does the Trump administration have the political will to vigorously enforce Obamacare? After all, Trump ran on a promise to repeal the healthcare plan. If his administration was to crack down hard on Idaho insurance companies offering a viable alternative for the people of Idaho, it would almost certainly face significant political blowback. If Idaho stands its ground and Blue Cross of Idaho refuses to give in, it seems possible Trump would back down. The feds have a long history of sending out bullying letters and then issuing extensions, waivers and exceptions. This is why more than a decade after it was signed into law, the federal government still hasn’t managed to implement the Real ID national identification scheme.

Second, it remains unclear whether CMS has the personnel and resources to enforce insurance law in the state of Idaho. It would undoubtedly require a significant amount of funding and manpower for the federal government to do so without state cooperation. While it possibly could manage enforcement in one state, it would almost certainly become overwhelmed if multiple states followed Idaho’s lead and stopped enforcing Obamacare insurance mandates.

Based on the rhetoric coming out of Idaho, it doesn’t appear the state plans to fight the feds. All the talk revolves around working with the CMS to find solutions.

The Republican Congress clearly won’t repeal Obamacare and the Trump administration seems intent on enforcing the ACA. If Americans want to rid themselves of this national healthcare debacle, it will require state action.

But more than that, it will take individual action.

Nullification of federal marijuana prohibition worked because people were willing to engage in the forbidden activity no matter what the feds said or did. States legalized marijuana and people used that open door to build markets for cannabis. In doing so, they took on the risk of federal prosecution. A lot of people paid a high price. Some lost significant amounts of money. Some even went to jail. But eventually, it collapsed the federal government’s ability to enforce its will.

Will insurance companies be willing to face down the fed? If other states followed Idaho’s lead by reforming state law, and hundreds of insurers across the country started selling policies non-compliant with Obamacare, there is no way the federal government could enforce its law. If we can do it for marijuana, surely we can do it for quality healthcare.

Mike Maharrey

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