Today in a speech President Obama made the case that he is going to administratively fix the “fumble” of people losing their current health insurance coverage due to ACA. The Wall Street Journal has a pretty good summary of this “fix”:
Senior White House officials said Thursday the administration would send letters to state insurance commissioners telling them that insurance carriers wouldn’t be required under the federal health law to drop policies because they didn’t meet the new coverage standards for 2014. Officials also said letters will be sent to insurers in the individual and small-group market notifying them that they can renew policies through next year and be in compliance with the health law.
So basically the Obama administration is going to tell the State’s that they can choose to ignore a portion of federal law that is causing millions of Americans to lose their current coverage. As someone who is against ACA I think it would be great to dismantle parts of the law. However at the same time I believe in Rule of Law. In this case we have a President that has said “it’s the law” many times to defend ACA, yet has no problems making illegal unilateral changes contrary to that law. That is not Rule of Law.
Where does the authority come from to give Obama the ability to unilaterally change the law? It is not in the Constitution. There is no portion of ACA that says “the President can change any portion of this law any time he wishes. So it must be specific to this particular piece of the law. Well lets look at section 1251 of the Patient Protection and Affordable Care Act (PDF). Section 1251 is labeled “PRESERVATION OF RIGHT TO MAINTAIN EXISTING COVERAGE.” Here is part (a) of section 1251:
(a) NO CHANGES TO EXISTING COVERAGE.—
(1) IN GENERAL.—Nothing in this Act (or an amendment made by this Act) shall be construed to require that an individual terminate coverage under a group health plan or health insurance coverage in which such individual was enrolled on the date of enactment of this Act.
(2) CONTINUATION OF COVERAGE.—With respect to a group health plan or health insurance coverage in which an individual was enrolled on the date of enactment of this Act, this subtitle and subtitle A (and the amendments made by such subtitles) shall not apply to such plan or coverage, regardless of whether the individual renews such coverage after such date of enactment.
OK, this is the portion that says you can keep a plan that was in place before the enactment of ACA; and it also provides that such plans can be renewed. As the title of this section says it is contingent upon “no changes to existing coverage. There is no authority here for Obama to unilaterally provide exemptions. But there are four other subsections to section 1251.
Here is subsection (b) of section 1251:
(b) ALLOWANCE FOR FAMILY MEMBERS TO JOIN CURRENT COVERAGE.—
With respect to a group health plan or health insurance coverage in which an individual was enrolled on the date of enactment of this Act and which is renewed after such date, family members of such individual shall be permitted to enroll in such plan or coverage if such enrollment is permitted under the terms of the plan in effect as of such date of enactment.
Subsection (b) allows family plans to add members to their plan and keep their grandfather status. Nothing there to give Obama authority to make this change.
Here is subsection (c) of section 1251:
(c) ALLOWANCE FOR NEW EMPLOYEES TO JOIN CURRENT PLAN.—
A group health plan that provides coverage on the date of enactment of this Act may provide for the enrolling of new employees (and their families) in such plan, and this subtitle and subtitle A (and the amendments made by such subtitles) shall not apply with respect to such plan and such new employees (and their families).
Subsection (c) allows employer plans to add employees or family members under grandfathered coverage. Nothing here gives Obama the authority.
Here is subsection (d) of section 1251:
(d) EFFECT ON COLLECTIVE BARGAINING AGREEMENTS.—
In the case of health insurance coverage maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers that was ratified before the date of enactment of this Act, the provisions of this subtitle and subtitle A (and the amendments made by such subtitles) shall not apply until the date on which the last of the collective bargaining agreements relating to the coverage terminates. Any coverage amendment made pursuant to a collective bargaining agreement relating to the coverage which amends the coverage solely to conform to any requirement added by this subtitle or subtitle A (or amendments) shall not be treated as a termination of such collective bargaining agreement.
Subsection (d) is a little longer. But it basically lets plans created under union agreements before the enactment of ACA to have an exemption. This does not exempt unions from Obamacare as I’ve seen reported in the past. Actually if anything it made it harder for them to get an exemption. But that is a different issue. Nothing in this section gives Obama the authority to unilaterally change the law.
Finally here is subsection (e) of section 1251:
In this title, the term ‘‘grandfathered health plan’’ means any group health plan or health insurance coverage to which this section applies.
Well, that is just the definition of grandfathered health plan. Definitely nothing there about authority for the President to unilaterally change the law.
After review of section 1251 I see nothing that allows the President to legally change the law as passed about grandfathered health insurance plans. I actually don’t even see any language in this section that could be twisted to imply he has that ability through an ‘administrative fix’. Part of me is outright mad that the President would presume to tell States to ignore a portion of a law he is mandating on all Americans (well except for those he has already given illegal exemptions). But then part of me hopes he does take this action. It will help those of us that believe in the Tenth Amendment ammunition in fighting against bad laws like ACA. Maybe if enough states take this action they will realize it isn’t so bad ignoring over-reaching and unconstitutional federal laws. If that is the case Obama’s unilateral illegal move may actually be a step closer to reducing the power of the federal government. It will be interesting to see how this pans out.
PS. To keeps this post on-topic I ignored the fact that most insurance companies simply won’t be able to quickly or easily reverse course. Even if Obama does this fix, or Congress through legislation, it may be too late to save the plans for those people getting letters.