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The Trump administration rejected on Thursday Idaho’s plan to allow the sale of stripped-down, low-cost health insurance that violates the Affordable Care Act. The 2010 statute “remains the law, and we have a duty to enforce and uphold the law,” Seema Verma, the administrator of the federal Centers for Medicare and Medicaid Services, said in a letter to the governor of Idaho, C. L. Otter. (Pear, 3/8)

Otter, Cameron and Lt. Gov. Brad Little announced earlier this year that they would begin allowing insurers to offer plans that don't meet all of the act's regulations, such as by charging people more based on their health history, or by not covering some health needs like maternity care. In the letter, Verma said such a move would force the federal agency to enforce the provisions of the Affordable Care Act on behalf of the state. That could include pulling regulatory authority from the Idaho Department of Insurance and fining insurance companies $100 a day for every person they insure on a noncompliant plan. (Boone, 3/8)

In her letter to Idaho authorities, Verma said that “with certain modifications, these state-based plans could be legally offered” as short-term plans. The White House has suggested to Congress that people should be able to renew short-term plans without being subject to medical underwriting, the process by which insurers can exclude or charge more for pre-existing conditions. (Tozzi, 3/8)

How the administration would respond to a rebel state’s attempt to create a parallel insurance universe for individual buyers has been widely considered a significant test of HHS Secretary Alex Azar in his initial weeks on the job. The issue calls on him to balance President Trump’s — and his own — eagerness to free states and consumers from the ACA’s dictates with his avowed commitment to adhere to the law. (Goldstein, 3/8)

Idaho’s Department of Insurance said in January it would allow insurers in the state to begin offering products that left out some of the benefits mandated by the ACA for individual coverage. Insurers would be able to consider enrollees’ medical history in setting their premiums, a practice known as underwriting, which isn’t authorized under the ACA. New state-based plans also could include dollar limits on total benefit payouts, which the ACA banned. The eight-page letter from Ms. Verma to Idaho Gov. Butch Otter and Insurance Commissioner Doug Cameron outlines several provisions that the Trump administration sees as falling afoul of the federal law. (Radnofsky, 3/8)

Idaho's proposal would allow insurers to sell plans that charge people with pre-existing conditions more, which is barred by ObamaCare, and not cover all of the required health services under the health law. Idaho officials argued the move was necessary to provide cheaper plans to younger, healthier people. (Sullivan, 3/8)

ACA supporters and some health insurance groups were guardedly relieved by the CMS' decision because they feared other GOP-led states would launch programs similar to Idaho's. They warned that allowing the sale of leaner plans that could charge much higher rates for older and sicker beneficiaries would create two separate risk pools, driving up premiums for people with costly medical conditions and potentially forcing insurers out of that market. (Meyer and Luthi, 3/8)

Kaiser Health News: Podcast: KHN’s ‘What The Health?’ HHS Leaders Take To The Stump

Three of the top officials of the Department of Health and Human Services — Secretary Alex Azar, Food and Drug Administration Commissioner Scott Gottlieb and Centers for Medicare & Medicaid Services Administrator Seema Verma — were out in force this week. All made major public appearances in an effort to reset the department’s agenda. In the wake of the failed congressional effort to “repeal and replace” the federal Affordable Care Act, the administration officials said they plan to focus on lowering the costs of health care and giving states and consumers more power. (3/8)