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The website for Connect for Health Colorado, the state's health insurance exchange, shown in October 2018. (Eric Lubbers, The Colorado Sun)

So let’s just get this out there: This is a story ostensibly about health insurance regulations — which normally wouldn’t send a tingle up many people’s spines. But really it’s a story about an ongoing, hidden battle camouflaged in hundreds of pages of regulatory documents.

Last summer, the Trump administration fired a shot at the Affordable Care Act with a new rule that will allow people to use short-term health plans for longer periods of time.

There’s a lot of backstory here, but, big-picture, this was widely seen as an attempt to weaken the ACA because short-term plans in many places don’t have to provide the level of coverage that ACA-compliant plans do and, thus, don’t cost as much. If people abandoned the ACA plans for cheaper short-term plans, the entire law — also known as Obamacare — could collapse.

Last month, though, Colorado’s insurance commissioner fought back against this rule, adopting a regulation that will make short-term plans here abide by almost all ACA requirements. That, in turn, means short-term plans will likely make little dent in Colorado’s insurance market.

It was guerrilla warfare through rulemaking, a back-and-forth exchange of regulatory grenades. And it revealed an often-overlooked front in how states — mostly those led by Democrats — are using normally tedious legal processes to undermine Trump administration policies locally.

The Colorado Air Quality Control Commission’s decision last year on low-emission vehicles is one such example.  So, too, was new Colorado Attorney General Phil Weiser’s announcement that he would withdraw the state’s legal objection to the Obama administration’s Clean Power Plan and would instead work to support it.

But the fight over short-term health plans provides a textbook example of how these battles are being fought.

The first shot

In August, after repeated, unsuccessful attempts to repeal the ACA, the Trump administration announced that it would allow people to use short-term health plans for up to a year — with the possibility of renewing those plans for up to three years. Previously, short-term plans had been just that, brief plans that got people between spells of regular coverage.

In the world of Democratic health policy, this rule was a mortar blast.

The ACA rests on the premise that insurers should have to provide a certain level of coverage. It requires insurers to sell plans to anyone. It prohibits insurers from charging people more money based on their health history. It dictates a list of medical services — like maternity care — that insurers have to cover.

Short-term plans, though, operated in Colorado and many other places like all insurance did prior to the ACA. Short-term plans could refuse to cover services that ACA plans must cover. They could deny all coverage to people based on pre-existing conditions.

The case for short-term plans

To conservatives, the ACA imposes regulations that provide people more coverage than they may need and that drive up the costs for everybody. Short-term plans, then, are more flexible and allow people to choose insurance that meets their needs and budget. According to an analysis by the nonpartisan Kaiser Family Foundation, short-term plans can have premiums that are more than 50 percent cheaper than ACA-compliant plans.

“President Trump is bringing more affordable insurance options back to the market,” U.S. Health and Human Services Secretary Alex Azar said in a statement announcing the new rule. “…These plans aren’t for everyone, but they can provide a much more affordable option for millions of the forgotten men and women left out by the current system.”

Returned fire

But, sitting in his Denver office, Colorado Insurance Commissioner Michael Conway saw these plans as junk that would fall apart on people as soon as they needed to use them.

“We can’t drive the affordability conversation by telling people we’re going to give them garbage coverage,” Conway — who was originally appointed by Gov. John Hickenlooper and was just re-appointed to his spot by Gov. Jared Polis — said in a recent interview.

Michael Conway (Courtesy of the Colorado Division of Insurance)

Colorado already limited short-term plans under state law. For instance, people here can only be on a short-term plan for up to six months, with the option for a single renewal taking them up to a year of short-term coverage. The Trump administration’s rule didn’t change that.

But Conway saw an opportunity to further strengthen the rules for short-term plans.

The state’s response

Back in 2013, Colorado lawmakers aligned state law with the ACA — meaning that, even if the ACA were repealed, insurers here would still have to provide the same level of protections for their regular plans. Under the regulation adopted last month, Conway said short-term plans are “health benefit plans,” the same as insurers’ regular plans and subject to almost all the same rules.

This was the return salvo.

When the new rule officially goes into effect in April, insurance companies will have to file new information about their short-term plans with the state and comply with the same requirements limiting their profits and administrative expenses. They will have to cover all the things ACA-compliant plans have to cover. They can’t charge people more or less based on how healthy they are.

“I think that’s the base level of coverage that people need,” Conway said.

The only major difference is that, while insurance companies have to sell short-term plans to anybody who wants them, they can still exclude coverage for pre-existing conditions. (That provision for short-term plans is specifically written into state law.)

The wonky war

To conservatives, the new state rule restricts the choice that the Trump administration was trying to create.

“Don’t make assumptions on what people need or what they want,” said Jesse Mallory, the Colorado state director of Americans for Prosperity. “Allow consumers to make these choices.”

But left-leaning health policy groups praised the rule, with Debra Judy, the policy director at the Colorado Consumer Health Initiative, saying in a statement, “We are happy to see that these plans will now provide coverage beyond the catastrophic.”

The insurance commissioner, meanwhile, downplayed the idea that this was part of an overall effort to fight back against Trump administration rules.

“When we see these things coming down from the federal level,” Conway said, “we just want to say, ‘We’re going to think this through and see if it makes sense.’”

But AFP’s Mallory said he has little doubt that state regulators will continue the wonky war against Trump priorities.

“I don’t think this will be the last thing we see,” he said.

John Ingold

John Ingold is a co-founder of The Colorado Sun and a reporter currently specializing in health care coverage. Born and raised in Colorado Springs, John spent 18 years working at The Denver Post. Prior to that, he held internships at the Rocky Ford Daily Gazette, the Colorado Springs...