Health insurer Blue Cross of Idaho filed plans with the Idaho Department of Insurance on Tuesday to sell a number of non-Affordable Care Act-compliant health insurance plans in the state. The announcement comes on the heels of both an executive order from Idaho Governor Butch Otter (R) "restoring choice in health insurance for Idahoans" and a more detailed bulletin issued last month by the Idaho Department of Insurance saying it would permit the sale of "state-based plans" that don't meet all of the ACA's regulations and requirements. Blue Cross of Idaho is the first insurer to announce it will offer such plans.
The five new products Blue Cross plans to offer would violate a number of the ACA's regulations—namely, the plans would include annual coverage caps (of $1 million per person, per year), the premiums would vary based on a person's health status, and maternity coverage (considered an essential health benefit under the ACA) would not be included.
The fate of such products is unclear. Many legal experts believe the proposed plans violate the law and insurers that offer them will surely be sued. After Idaho issued its bulletin last month, Nicholas Bagley, a law professor at the University of Michigan, described the plans in a tweet as being "crazypants illegal."
"It's not even close," Bagley continued. "Does Idaho think the supremacy clause doesn't apply to it?"
When asked about the announcement at a hearing this morning, Alex Azar, the secretary of Health and Human Services, said "there is a rule of law that we need to enforce," although he didn't commit to any specific actions with respect to Idaho.
Health experts warn that the plans, in addition to reducing protections for consumers, will pull young, healthy people out of the ACA-compliant market, thus driving up premiums on ACA-compliant plans.