Idaho is about way more than Obamacare

There is a lot more at stake in Idaho than Obamacare.

That’s what I’ve come to realize over the past few weeks. I’ve spent a lot of time talking to people who would defend the state’s plan to allow non-Obamacare insurance plans back onto the market and the people who view those arguments as patently ridiculous.

What I’ve learned is: This isn’t just about whether a state can bring back preexisting conditions. This isn’t just about what they would do to Idaho’s insurance market and the people left behind in the Obamacare exchanges, where actuaries say premiums would increase.

Instead, there are some more fundamental questions at play about a state and the federal government’s obligation to enforce the law of the land — and whether we will set what some would call a very dangerous precedent about ignoring the law when we don’t agree with it.

Some of these arguments will sound familiar if you’ve been reading this newsletter, but it’s worth digesting this memo from Blue Cross of Idaho’s outside counsel in full. In defense of the state’s proposal, he makes a few arguments:

  • The insurance market in Idaho has deteriorated enough to warrant such drastic action.
  • There is just enough wiggle room in the ACA’s statutory language to give states discretion to relax some of its insurance regulations.
  • There is already some precedent — particularly the Obama administration’s ”if you like your plan, you can keep it” fix, which allowed states to extend non-Obamacare insurance plans — for bending the rules under the ACA.
  • Alternatively, allowing non-ACA plans will actually further Congress’s goals of extending health coverage and will shore up the law’s markets, though actuaries report otherwise.
  • It would be best if the Trump administration gave some sort of informal approval to Idaho’s plan, rather than simply not addressing it.

This is very similar to what I heard last week when I spoke by phone with Richard Epstein, a New York University law professor who is advising Blue Cross.

Epstein, a strong libertarian, has articulated an entire theory of government by waiver — stating as a matter of fact that we are already governed more by administrative discretion than the rule of law, a development that back in 2011 he was very worried about.

But given current realities, and the situation in Idaho, Epstein argued to me that this was a case where some kind of informal waiver from the ACA would be in Idaho’s best interests. He did not seem thrilled about the idea, but he said the circumstances warranted it. (The Blue Cross memo cites a 70 percent premium increase since 2014 on the marketplace and a 66,000-person increase in the uninsured ranks in 2016 to justify the plan.)

Epstein characterized the ad hoc Idaho waiver that he would propose as “trying to break the government rigidity under circumstances of necessity, where if you don’t do something, very bad consequences will happen to everybody” — though he added he was “in favor of it and uncomfortable about it.”

”There’s no exit. Either you relax the benefits or the system collapses,” he said. “Better that you face the uncertainties of how a waiver system works than the certainty of going down the tubes.”

Epstein also sees Idaho as a potential model, after some experience and some fine-tuning as a result of that experience, for other states.

”My hope is they will be allowed to do this thing. My expectation is it will work pretty well,” he said. “Once you get it out there and you’re working it, these guys can fine-tune it and generalize it. You will take the pressure off a system that has imploded in too many states.”

I should say now: Legal minds whom I really respect — particularly Katie Keith at Georgetown University and Nicholas Bagley at the University of Michigan — find these arguments deeply unpersuasive. Every time I ask them about it, I can almost hear them screaming, “THIS IS NOT NORMAL!”

There is an acknowledgment, though, that Idaho’s defenders aren’t producing these arguments out of thin air. Some policies from the Obama administration — the “like it, keep it” fix and marijuana legalization — were founded in uncomfortably similar logic.

But we simply don’t live in a world, Bagley told me by email over the weekend, “where the executive can just dispense with the law when he wants to.”

”We could move into that world, and the ‘like it, keep it’ fix set a dangerous precedent for that reason,” he said. “But, in my judgment and in the judgment of virtually every lawyer out there, that’d be a very bad world. And we’re nowhere near there yet.”

I’m inclined to side with Bagley in these matters. But some very smart people on the other side are pulling together increasingly sophisticated arguments in the other direction.

These are people who have found purchase with the federal judiciary before. Everybody in the health policy world seems to suffer from chronic post-King v. Burwell self-doubt for a reason.

So this is something to watch very closely as the Idaho situation — where we’re playing with live bullets — continues to unfold.

This story appears in VoxCare, a newsletter from Vox on the latest twists and turns in America’s health care debate. Sign up to get VoxCare in your inbox along with more health care stats and news.

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