Is the President's Obamacare Tweak Legal?
Writing at the Volokh Conspiracy, Case Western Reserve Law Professor Jonathan Adler is skeptical:
According to the President's announcement, insurance companies will be allowed to renew policies that were in force as of October 1, 2013 for one additional year, even if they fail to meet relevant PPACA requirements. What is the legal basis for this change? The Administration has not cited any. (See, e.g., this letter to state insurance commissioners explaining the change.) According to various press reports, the Administration argues it may do this as a matter of enforcement discretion (much as it did with immigration). In other words, the Administration is not changing the law. It's just announcing it will not enforce federal law (while simultaneouslythreatening to veto legislation that would authorize the step the President has decided to take).
Does this make the renewal of non-compliant policies legal? No. The legal requirement remains on the books so the relevant health insurance plans remain illegal under federal law. The President's decision does not change relevant state laws either. So insurers will still need to obtain approval from state insurance commissioners. This typically requires submitting rates and plan specifications for approval. This can take some time, and is disruptive because most insurance companies have already set their offerings for the next year. It's no wonder that some insurance commissioners have already indicated they have no plans to approve non-compliant plans.
Yet even if state commissioners approve the plans, they will still be illegal under federal law.
We've already seen resistance from state insurance commissioners, who have argued that the president's proposed tweak simply isn't feasible. And the health insurance industry doesn't seem particularly thrilled with the plan either. Insurers have a meeting at the White House today, so we'll presumably have a better idea of where health plans stand by the end of the day.