Dear Director Cameron:
Last month, the Idaho Department of Insurance issued a bulletin permitting the sale of “state-based plans" that do not satisfy consumer protections required of individual market insurance coverage under federal law.[1] We request an explanation of how the Idaho Department of Insurance plans to regulate insurance plans being sold in the individual market that are not compliant with federal law.
We strongly oppose efforts that result in higher costs and undermine consumer protections that are guaranteed in Federal law that protect women, people with pre-existing conditions, and others facing discrimination in access to health care. Idaho state officials have reportedly discussed the concept of these “state based plans" with federal regulators at the U.S. Department of Health and Human Services (HHS), including with former Secretary Tom Price.[2]
On Tuesday, Blue Cross of Idaho requested state regulatory approval to begin marketing five of these “state-based plans," which it hopes to begin selling in early March for coverage to begin in April. The proposed plans would charge higher premiums for older and sicker patients in ways that are prohibited under federal law, which permits variation in premiums based only on family size, geography, age, and tobacco use.[3] Blue Cross of Idaho’s application for these “state-based plans" seeks information about a potential enrollee’s medical history, ranging from reproductive health conditions to a history of mental illness and substance use, and the insurer would be permitted to charge enrollees more based on their responses.[4] The plans can deny coverage for those with pre-existing conditions who have not had continuous coverage.[5] The plans would also include annual limits on coverage, and at least one plan would not cover critical essential health benefits like maternity care.
Other Idaho insurers have so far declined to apply to sell these state-based plans, citing concerns that the guidance contained in the Idaho Department of Insurance’s bulletin conflicts with federal regulations. Carriers that violate the Public Health Service Act are subject to a penalty of up to $100 per day for each individual that receives coverage that fails to comply with Federal law. The Public Health Service Act requires the federal government to step in if a state is not “substantially enforcing" Federal insurance law.
Those insurers also raised concerns about the impact of these plans on the single risk pool in Idaho’s individual insurance market and the potential to introduce “unnecessary uncertainty into the market."[6]
We request a staff briefing in order to understand how the Idaho Department of Insurance plans to regulate these “state-based plans" and to address the resultant effects on the individual insurance market. Please also provide the following documents and responses by no later than February ##, 2018:
Thank you in advance for your attention to this critical matter. If you have any questions or would like to discuss further compliance with this request, please contact Elizabeth Letter or Colin Goldfinch with Senator Murray’s HELP Committee Staff at 202-224-0767.
Sincerely,
Patty Murray
Ranking Member
Senate Health, Education, Labor, and Pensions Committee
Ron Wyden
Ranking Member
Senate Finance Committee
Frank Pallone, Jr.
Ranking Member
House Committee on Energy and Commerce,
Richard E. Neal
Ranking Member
House Committee on Ways and Means
