Credit where credit is due: the Trump administration announced yesterday that it won’t look the other way if Idaho flouts the Affordable Care Act. The ACA “remains the law and we have a duty to enforce and uphold the law,” CMS administrator Seema Verma explained in a letter to Idaho’s governor and its insurance director.
Maybe it’s a mark of how low we’ve sunk that I’m surprised, happy, and relieved to see the Trump administration acknowledge that the law is the law. But politics ain’t beanbag, and Azar and Verma were under immense pressure to allow Idaho to regulate its health insurers without regard to the ACA. That they chose to push back is a testament to their integrity.
Not that the ACA is out of the woods. In her letter, Verma notes that HHS has issued a proposed rule to allow for the sale of short-term health plans that would offer coverage for up to 364 days in a year. By statute, “short-term, limited duration insurance” are exempted from the ACA’s rules. If the rule is finalized, Verma believes that Idaho could allow for the sale of exactly the same noncompliant plans, so long as those plans trim their coverage by one day. Idaho can’t ignore the ACA, but it can bypass it.
Can this be right, though? Can it really be against the law to sell a noncompliant health plan that offers coverage for the whole year, but completely OK to sell the exact same plan if it covers someone for the whole year less one day?
I’m skeptical. Health insurance is typically sold on a one-year basis. If 365 days is the relevant baseline, how can you say with a straight face that a 364-day plan is “short term limited duration insurance”? The statute doesn’t define the term, which means that HHS has some discretion to set a standard. But HHS doesn’t have the discretion to interpret the exception to swallow the rule.
Not only does HHS’s proposed interpretation do violence to the language of the statute. Verma’s letter stands as a tacit acknowledgment that Idaho can achieve its goal of subverting the ACA by exploiting a loophole for short-term plans. How can the agency claim that it’s being faithful to the statutory plan if its interpretation would countenance such flagrant disregard of the law?
The best argument I’ve heard in defense of HHS’s proposal is that it would simply restore a rule that was on the books for twenty years before the Obama administration decided, in 2016, to clamp down and limit “short-term, limited duration insurance” to three months. That argument does give me pause: an agency interpretation of longstanding vintage is entitled to some respect.
But the courts have no problem striking down old rules if they’re inconsistent with statutory text. And, for my part, I’m struggling to understand how a plan that’s 0.27% shorter than a typical insurance plan can possibly count as “short-term limited duration insurance.”