Idaho to test non-compliant insurance plans

BOISE, Idaho -- Concerned about soaring health care costs, Idaho on Wednesday revealed a plan to allow insurance companies to sell cheap policies ditching key provisions of the Affordable Care Act.

It's believed to be the first state to take formal steps without prior federal approval for creating policies not complying with the Obama-era health care law. Health care experts say the move is legally dubious, a concern supported by internal records obtained by The Associated Press.

Idaho Department of Insurance Director Dean Cameron said the move is necessary to make cheaper plans available to more people. Otherwise, he said he fears the state's individual health insurance marketplace will eventually collapse as healthy residents choose to go uninsured rather than pay for expensive plans complying with the federal law.

"There are other states that have been talking about it, but we may be out in front," Cameron said. "They may look to follow us should be we successful."

Many states have seen annual double-digit increases in health insurance premium costs, a trend expected to continue -- and perhaps get worse -- under the recently signed Republican tax plan.

The new tax law ended the Affordable Care Act provision requiring people to buy health insurance or pay a tax penalty. Without the threat of a penalty, health care experts predict younger and healthier people will go without policies, leaving sicker patients in the marketplaces and forcing insurers to raise costs.

The Idaho plan would make it possible for insurance companies to offer cheaper plans more attractive to people who have to buy their own insurance and do not benefit from the federal premium subsides offered under the Affordable Care Act. The catch is those plans would be skimpier.

They might not offer protections for people with pre-existing medical conditions, for example, or cap out-of-pocket expenses. They also would not have to comply with the 10 "essential benefits" insurers are required to cover under the Affordable Care Act. Those include emergency care, hospitalization, maternity care, mental health and laboratory costs.

Insurers offering such plans in Idaho still would have to offer policies that comply with the federal health care law for those who want them, Cameron said.

Whether the state can legally follow through on its proposal is an open question.

Robert Laszewski, a former insurance executive who is now a health policy consultant, doesn't think Idaho's approach can stand up in court, even if federal oversight agencies decide to let it move forward. The Affordable Care Act is the law of the land, he said, and has been upheld by the U.S. Supreme Court.