BOISE, Idaho (Jan. 29, 2018) – New insurance regulations in Idaho will allow health insurance companies to offer less costly plans that do not comply with all of the Obamacare mandates and requirements, taking a big step toward nullifying the unconstitutional Affordable Care Act in the state.
Idaho Department of Insurance Director Dean Cameron released details of the plan on Wednesday. According to an AP report, 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 new rules will expand the market and allow consumers greater choice. Those willing to settle for more limited coverage at a lower premium will have that option.
Cameron said the new rules were necessary to keep the state’s individual health insurance marketplace from collapsing as healthy residents choose to go uninsured rather than pay for expensive plans that comply with the federal law.
Unsurprisingly, supporters of Obamacare condemned the plan and there is already talk of lawsuits. They claim the state can’t ignore ACA mandates because of the supremacy clause.
“The bottom line is federal law pre-empts state law … state standards can only apply when they are more demanding than the federal standards,” health policy consultant Robert Laszewski said.
Under the original Constitution, as ratified, the power to regulate the healthcare system left to the states. ACA usurps state power and is unconstitutional, despite the pronouncements of politically connected lawyers on the Supreme Court. Since Obamacare was not established pursuant to the Constitution, the supremacy clause does not apply. As Alexander Hamilton wrote in Federalist #78, “No legislative act, therefore, contrary to the constitution, can be valid.”
Nevertheless, in today’s legal climate, Idaho may well face legal challenges to its new insurance rules. The question is can the federal government compel the state insurance commissioner to enforce its mandates, or even implement Obamacare at all?
In effect, the Idaho Department of Insurance will simply stop 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 completely in the hands of the federal government.
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.”
Idaho’s plan to simply not enforce certain aspects of Obamacare stands on firm legal ground. The question is whether or not the federal government can pressure insurers into compliance. According to an email written by the insurance commissioner, there is concern that the federal Centers for Medicare and Medicaid Services can penalize insurance providers as much as $100 per insured, per day. Whether the agency could effectively investigate, impose and collect this fine with its limited resources remains questionable.
The other concern was that the feds would try to strip Idaho of its regulatory authority.
“The only other penalty is the feds could declare that we (Idaho DOI) are not enforcing the individual market requirements and therefore attempt to take away our regulatory authority on the individual market,” Cameron wrote. “Of course we would strongly fight that in court.”
Idaho would seem likely to win this challenge based on the anticommandeering doctrine.
The feds may be able to crack down on insurers in Idaho, but if other states follow the lead and simply stop enforcing all of the mandates, it could effectively collapse Obamacare. This would represent the repeal the Republican in Congress can’t seem to deliver.