Dem rep: I’m not sure Obama’s “fix” for canceled plans is exactly legal

posted at 2:01 pm on November 18, 2013 by Allahpundit

It’s Nick Rahall, who was all of 27 years old when he was sworn in for his first term in the House in 1977 and has been there ever since — well more than half his life. His problem is that he comes from West Virginia, a state that’s gradually been turning redder: After winning 15 of 16 House elections with more than 60 percent of the vote, Rahall took “only” 56 percent in the big red wave year of 2010 and then 54 percent against his opponent last year. The fact that he’s straining to signal his opposition to O-Care this early, not only voting for Fred Upton’s bill but telling any reporter who’ll listen what a headache this has become for Democrats, shows you how worried he is about another big red wave next year sending him out to sea.

His new soundbite to distance himself from the fiasco is that Obama’s “keep your plan” fix might actually be illegal. Remember, the White House claims that federal agencies like HHS have authority under Supreme Court precedent (Heckler v. Chaney) to enforce laws selectively. I wrote about it last week. It’s true — sort of. You can’t force the local U.S. Attorney to prosecute someone; you can’t force the FDA to investigate a particular drug. Resources are scarce, and courts usually aren’t in the business of telling agencies how to allocate those resources in carrying out their mission. Except … that’s not what Obama’s “fix” purports to do. He’s proposing a blanket policy by which all insurers are free to flout the law laid down in ObamaCare in order to resurrect illegal insurance plans for the next year. Selective enforcement in the name of efficiently applying resources has nothing to with it. That’s a big problem, says law prof Nicholas Bagley:

First, it’s not the federal government’s job to enforce the ACA’s insurance rules. That’s up to the states. It’s hard to justify the administrative fix as an exercise of enforcement discretion when someone else is doing the enforcing. (The feds can step in if a state fails to “substantially enforce” the ACA. But the states were prepared to enforce the law, which is why insurers canceled their non-conforming plans in the first place.)

Second, Heckler is mostly concerned with giving agencies the space to make “discretionary judgment[s] concerning the allocation of enforcement resources.” The administration’s decision to stop deporting DREAMers, for example, can be defended as that kind of judgment. With millions of people in violation of the immigration laws, it’s sensible to devote limited resources to deporting the worst offenders. Here, in contrast, the fix doesn’t really have anything to do with resource allocation. Wedging it into the Heckler rule may therefore be hard…

[T]he D.C. Circuit has suggested that Heckler should be confined to “single-shot” decisions not to enforce against small, discrete sets of violators. In words that seem pertinent here, the court has said that “an agency’s pronouncement of a broad policy against enforcement poses special risks that it has consciously and expressly adopted a general policy that is so extreme as to amount to an abdication of its statutory responsibilities.” Distinguishing between single-shot decisions and broad policies isn’t as easy as you might think—even the agency choice at issue in Heckler wasn’t, strictly speaking, a single-shot decision. But the breadth of the fix is another strike against it.

Two problems, though. First, who’s going to sue insurers for offering resurrected plans? The GOP won’t. After spending months arguing that O-Care is egregious because it deprives people of coverage they like, they’re not going to get behind a lawsuit that would, if successful, deprive people of coverage they like. More likely, I think, is Jonathan Adler’s theory of a dispute arising between an insurer and a customer who’s re-enrolled in an un-canceled plan. Even there, though, what incentive does either have to sue in hopes of getting the plan re-canceled? If a court finds the plan illegal, there’d be chaos for the insurer and a lapse in coverage for the customer. Bad news, whoever “wins.” Second, precisely because an adverse ruling next year could wreak havoc for millions of people with un-canceled plans, how likely is it that a court would issue that ruling by finding the plans illegal? It’d be one thing if Landrieu’s bill had passed and the un-canceled plans were set to be offered indefinitely by insurers, but O’s “fix” (like Upton’s bill) is temporary. For prudential reasons, a court would be more likely to let it play out by finding the issue nonjusticiable, no?


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

More likely, I think, is Jonathan Adler’s theory of a dispute arising between an insurer and a customer who’s re-enrolled in an un-canceled plan. Even there, though, what incentive does either have to sue in hopes of getting the plan re-canceled?

Anyone who gets denied coverage that wouldn’t be denied under Obamacare. Or has to pay out of pocket more than he would under Obamacare. And these situations won’t be known until later in the year. But they will happen. It’s not if, but when.

besser tot als rot on November 18, 2013 at 2:08 PM

“You’ve got me” –Obama

SoRight on November 18, 2013 at 2:10 PM

More likely, I think, is Jonathan Adler’s theory of a dispute arising between an insurer and a customer who’s re-enrolled in an un-canceled plan.

Un-canceled or not, they are illegal under Obamacare. I can easily see somebody in an un-canceled plan if it is an area that would be covered by Obamacare. The administration is only proposing to ignore the letter of the law. Which is why I suspect few states or insurers will sign on to the Obamacare “fix” unless strong-armed into doing so.

Happy Nomad on November 18, 2013 at 2:13 PM

Obama wants an executive order to fire Nick Rahall. Heh.

22044 on November 18, 2013 at 2:13 PM

More likely, I think, is Jonathan Adler’s theory of a dispute arising between an insurer and a customer who’s re-enrolled in an un-canceled plan. Even there, though, what incentive does either have to sue in hopes of getting the plan re-canceled? If a court finds the plan illegal, there’d be chaos for the insurer and a lapse in coverage for the customer. Bad news, whoever “wins.” Second, precisely because an adverse ruling next year could wreak havoc for millions of people with un-canceled plans, how likely is it that a court would issue that ruling by finding the plans illegal?

Then why would the insurers bother going along with this in the first place? Why reintroduce those cancelled plans only to watch Obama pull the rug out from under them a year from now(if not sooner) and change the law yet again based on whatever way the political winds are blowing at that time? It’s the same argument some border hawks use regarding immigration reform. How can you negotiate in good faith with Obama when he does whatever he pleases regardless of what the law says?

Which leaves only two reasons the insurers would play ball with the regime. First, is because they’re dealing with a bunch of Chicago thugs in the White House who will do whatever they can to destroy the insurers if they don’t. And secondly, they almost have to in order to ensure they’re in the running for those massive bailouts built into Obamacare should this thing implode as expected.

Who gets screwed in the end? The American people, twice over. Once as customers in the health insurance market and a second time as taxpayers.

Doughboy on November 18, 2013 at 2:13 PM

don’t call my bluff, yo.

ted c on November 18, 2013 at 2:14 PM

I believe the biggest risk is if someone has a health problem that their old plan does not cover but is mandated by ObamaCare and they die or suffer serious injury. At that point the insurance company is liable because the policy they sold does not meet the requirements of the law and thus the insurance company has committed gross negligence for selling an unlawful plan. Remember, he decided not to enforce the mandate but as we all noted, it is still the law. I can see the class action adds from the ambulance chasers already.

Mark

mailmars on November 18, 2013 at 2:15 PM

Dem rep: I’m not sure Obama’s “fix” for canceled plans is exactly legal

When has that ever stopped this White House?

Bitter Clinger on November 18, 2013 at 2:17 PM

Why not find out for sure and then hold Dog Eater accountable.

Are you a rep of the people or of your Party, is this a nation of laws or a nation of men.

Bishop on November 18, 2013 at 2:18 PM

Non-Obamacare compliant insurance plans from 2013 will never be sold again because they can’t possibly get through the state insurance regulators for a couple of reasons. One, the regulators whether Republican or Democratic will jealously guard their authority. Two, the sheer level of bureaucracy involved, mostly at the state level but also in the insurance companies.

slickwillie2001 on November 18, 2013 at 2:20 PM

“The more the plans fail, the more the planners plan.”

Common Sense Floridian on November 18, 2013 at 2:21 PM

Who gets screwed in the end? The American people, twice over. Once as customers in the health insurance market and a second time as taxpayers.

Doughboy on November 18, 2013 at 2:13 PM

That’s change you can believe in….

According to the progressive leadership, the American people deserve to get screwed since they’ve not fully embraced delegating their freedom, liberty, and wealth to a totalitarian progressive government.

Athos on November 18, 2013 at 2:22 PM

AP, I think you’re missing the litigation problem with this “fix”.

Suppose that an insurer does accept the fix and offers some plan that is actually illegal under Obamacare.

Person X buys it.

Person X then has some illness or situation that isn’t covered under the plan. Person X sues the insurance company.

The insurance company then has to go to court to defend their illegal plan. How well do you think that’s gonna work out for them?

This is the simplest case, but there are all kinds of lawsuit scenarios that you can dream up for this and in every case the insurer has to go before a judge and claim that they were doing the right thing according to their illegal plan.

And in every case, the judge is going to laugh and make them pay. Big.

Any insurance company executive that accepts Obama’s “fix” should be terminated immediately.

Chris of Rights on November 18, 2013 at 2:24 PM

I believe the biggest risk is if someone has a health problem that their old plan does not cover but is mandated by ObamaCare and they die or suffer serious injury. At that point the insurance company is liable because the policy they sold does not meet the requirements of the law and thus the insurance company has committed gross negligence for selling an unlawful plan. Remember, he decided not to enforce the mandate but as we all noted, it is still the law. I can see the class action adds from the ambulance chasers already.

Mark

mailmars on November 18, 2013 at 2:15 PM

Absolutely. And I can just see the insurance companies’ defense – But President Obama told me I did not have to follow the law! – That should go over well in court.

mbs on November 18, 2013 at 2:26 PM

Is it just me, or does Heckler v. Chaney sound like the name of a documentary about vice-presidential press conferences?

The Schaef on November 18, 2013 at 2:27 PM

Democrats are opening up a huge can of worms. Just wait for the next Republican president to exercise his discretion and not enforce the corporate tax code or the tax on capital gains.

blammm on November 18, 2013 at 2:37 PM

I believe the biggest risk is if someone has a health problem that their old plan does not cover but is mandated by ObamaCare and they die or suffer serious injury. At that point the insurance company is liable because the policy they sold does not meet the requirements of the law and thus the insurance company has committed gross negligence for selling an unlawful plan.

Nothing in the “fix” prohibits anyone from purchasing a plan that is compliant, therefore, you have to choose not to purchase a compliant plan, and with that goes your claim of liability.

BobMbx on November 18, 2013 at 2:38 PM

Yeah, right. They won’t enforce the mandate against their friends and favored constituencies. You can bet they will enforce it against their political opponents, though. He already has a record of sending the IRS after his enemies; Obamacare gives him one more way to do that. Tea Partiers better have Obamacare compliant plans or keep their mouths shut.

bitsy on November 18, 2013 at 2:40 PM

36 years in the House? And I never heard of him? Poster boy for term limits. West Virginia voters are pathetic. Evidence KKK Bob Byrd and Jay Rockefella.

cat-scratch on November 18, 2013 at 2:43 PM

OT:

This is too good to not share.

Joan Jett on getting kicked off South Dakota’s float in Macy’s T-Day parade:

(CNN) — Rock star Joan Jett was removed from a parade float representing South Dakota in the Macy’s Thanksgiving Day Parade after ranchers protested her appearance, saying she’s a vegetarian and a critic of their livestock production.
Jett is a supporter of People for the Ethical Treatment of Animals, the world’s largest animal rights group that promotes a vegetarian diet and condemns factory farms and ranches.

“I’ve decided to switch from South Dakota to another float because people’s political agendas were getting in the way of what should be a purely entertainment driven event,” Jett said in a statement Saturday. “I will remain focused on entertaining the millions of people watching, who will be celebrating a great American tradition.

By eating turkeys and pigs.

BobMbx on November 18, 2013 at 2:47 PM

Nick Rahall is racist. Just ask the world’s most popular killer whale.

HiJack on November 18, 2013 at 2:48 PM

“I will make it legal” – Darth Sidious/Obama

ThePrez on November 18, 2013 at 2:48 PM

Nothing in the “fix” prohibits anyone from purchasing a plan that is compliant, therefore, you have to choose not to purchase a compliant plan, and with that goes your claim of liability.

BobMbx on November 18, 2013 at 2:38 PM

Slippery slope–I can see both sides, but the consumer having the “smallest pockets” and no legal staff would lose regardless.

hillsoftx on November 18, 2013 at 2:51 PM

AP, I think you’re missing the litigation problem with this “fix”.

Suppose that an insurer does accept the fix and offers some plan that is actually illegal under Obamacare.

Person X buys it.

Person X then has some illness or situation that isn’t covered under the plan. Person X sues the insurance company.

The insurance company then has to go to court to defend their illegal plan. How well do you think that’s gonna work out for them?

This is the simplest case, but there are all kinds of lawsuit scenarios that you can dream up for this and in every case the insurer has to go before a judge and claim that they were doing the right thing according to their illegal plan.

And in every case, the judge is going to laugh and make them pay. Big.

Any insurance company executive that accepts Obama’s “fix” should be terminated immediately.

Chris of Rights on November 18, 2013 at 2:24 PM

Saved me from typing it.

Arnold Yabenson on November 18, 2013 at 2:52 PM

Geez–the ACA itself isn’t legal. If it wouldn’t be for John “the pansy from hell” Roberts, that would have already been taken care of.

ElectricPhase on November 18, 2013 at 2:53 PM

Dem rep: I’m not sure Obama’s “fix” for canceled plans is exactly legal

Careful there! People have been fired for saying such things!

Hey, that’s not a bad idea…. Instant term-limits!

There Goes the Neighborhood on November 18, 2013 at 2:59 PM

Nothing in the “fix” prohibits anyone from purchasing a plan that is compliant, therefore, you have to choose not to purchase a compliant plan, and with that goes your claim of liability.

BobMbx on November 18, 2013 at 2:38 PM

That assumes that one can actually purchase a compliant plan. If the website isn’t functional within the next 2 to 3 weeks, then consumers could argue that returning to their non-compliant plan was their only option.

sewer urchin on November 18, 2013 at 3:06 PM

And neither was ignoring immigration laws, DOMA, the new black panthers, NSA spying, IRS targeting the Tea Party, passing a form of the dream act by EO, passing Ocare by “deem and pass” and so much more. Obama would have been impeached long ago except for one reason, an ugly pederast named Harry Reid aka Son of Satan, aka evil incarnate. He could watch Obama murder a nun on tv and would say she had it coming. The house can vote to impeach but son of satan will let the paperwork sit in his desk drawer for years or until he gets booted out of the why. Hence why its important that as many Dems get booted next year, especially from the senate. Imagine the delicious visual of an impotent Harry Reid having to watch powerlessly as his agenda goes bye bye.

neyney on November 18, 2013 at 3:07 PM

First, it’s not the federal government’s job to enforce the ACA’s insurance rules. That’s up to the states. It’s hard to justify the administrative fix as an exercise of enforcement discretion when someone else is doing the enforcing. (The feds can step in if a state fails to “substantially enforce” the ACA. But the states were prepared to enforce the law, which is why insurers canceled their non-conforming plans in the first place.)

Is this a case of, “When all you have is a hammer, every problem looks like a nail?”

It sounds like, having gotten away with it in immigration, Obama is trying to stretch “prosecutorial discretion” to absurd lengths even when he’s not the one “prosecuting.”

There Goes the Neighborhood on November 18, 2013 at 3:08 PM

The DIMocrat from WV is running scared and is worried about reelection… GOOD!!

Khun Joe on November 18, 2013 at 3:09 PM

Here’s an interesting tidbit from Rand Paul at the Charleston Meeting the other day:

I’m still learning about it. It’s 20,000 pages of regulations. The Bill was 2,000 pages and I didn’t realize this until this week, the whole idea of you losing or getting your insurance cancelled wasn’t in the original Obamacare. It was a regulation written by President Obama, three months later.

So we had a vote, this is before I got up there. The Republicans had a vote to try to cancel that regulation so you couldn’t be cancelled, to grandfather everybody in. You know what the vote was? Straight party line. Every Democrat voted to keep the rule that cancels your insurance

M240H on November 18, 2013 at 3:15 PM

Dem rep: I’m not sure Obama’s “fix” for canceled plans is exactly legal

..I am; it ain’t.

By the way, this guy’s been doing 25-to-life? It’s time he was paroled don’t you think.

The War Planner on November 18, 2013 at 3:24 PM

Imagine you purchased a plan 5 years ago and developed a condition while the plan was in effect that required $50K in ongoing annual medical treatment and prescription drugs.

Your insurer paid the benefits under the terms of the policy.

Your plan is cancelled because it does not comply with the ACA requirements.

You ask your insurer if you can buy back into your old plan.

Since the old plan was cancelled and you are now inquiring about a replacement plan, how will the insurance company address your medical condition? If the language in the canceled policy excluded pre-existing conditions, the insurance company would have to alter your old policy in order to continue coverage for your condition. They could not simply dust off the file, change the dates and send it to you for signature.

What if they refuse?

What if you had a relatively minor pre-existing condition before you bought your old plan and you were willing to roll the dice and live with the condition, even though it was not covered under your old plan. Could your insurer still deny this pre-existing condition under a new plan or would they have to include coverage. If they do include coverage can they adjust their premium to account for their increased risk?

There are just too many considerations to be ironed out on the fly in just a couple of weeks for any state insurance regulator to touch this with a ten foot pole.

sewer urchin on November 18, 2013 at 3:30 PM

“I just need to know who’s ass to kick”

Barack “The Killa Gorilla” Obama

What?????

Mimzey on November 18, 2013 at 3:36 PM

It’s Nick Rahall, who was all of 27 years old when he was sworn in for his first term in the House in 1977 and has been there ever since — well more than half his life

good lord, these voters are idiots..

dmacleo on November 18, 2013 at 3:37 PM

Two problems, though. First, who’s going to sue insurers for offering resurrected plans? The GOP won’t. After spending months arguing that O-Care is egregious because it deprives people of coverage they like, they’re not going to get behind a lawsuit that would, if successful, deprive people of coverage they like. More likely, I think, is Jonathan Adler’s theory of a dispute arising between an insurer and a customer who’s re-enrolled in an un-canceled plan. Even there, though, what incentive does either have to sue in hopes of getting the plan re-canceled? If a court finds the plan illegal, there’d be chaos for the insurer and a lapse in coverage for the customer. Bad news, whoever “wins.” Second, precisely because an adverse ruling next year could wreak havoc for millions of people with un-canceled plans, how likely is it that a court would issue that ruling by finding the plans illegal? It’d be one thing if Landrieu’s bill had passed and the un-canceled plans were set to be offered indefinitely by insurers, but O’s “fix” (like Upton’s bill) is temporary. For prudential reasons, a court would be more likely to let it play out by finding the issue nonjusticiable, no?

Think about that for a moment. What you are illuminating with this is that we have reached the point where properly enforcing a law and over-riding executive fiat will cause massive chaos and health care issues for literally millions of people.

We are broken.

nukemhill on November 18, 2013 at 3:41 PM

John Roberts said that Obamacare was a “tax”.

The Constitution says:

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence[note 1] and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States

Obama just changed the tax structure without the consent of Congress.

Obama is breaking the law.

Lock him up and throw away the key.

fogw on November 18, 2013 at 3:41 PM

Absolutely. And I can just see the insurance companies’ defense – But President Obama told me I did not have to follow the law! – That should go over well in court.

mbs on November 18, 2013 at 2:26 PM

Well, didn’t that work extremely well for the man who followed the Vice Presidents advice on home intruders? I mean he did exactly what Joe Biden told him to do, fire a couple of warning shots through the door….LOL

Johnnyreb on November 18, 2013 at 3:46 PM

Since we’re talking about Supreme Court precedent (and as noted before Heckler isn’t applicable here), take a look at Youngstown Sheet & Tube v. Sawyer, which stopped Truman from taking over steel mills.

Dan Tanna on November 18, 2013 at 4:05 PM

First, who’s going to sue insurers for offering resurrected plans?

Maybe a competing insurance company that made the decision not to break the law? If following the law imposes an economic burden on them relative to those who accept Obama’s invitation, that would constitute financial harm and give the company standing in court.

Socratease on November 18, 2013 at 4:42 PM

Since we’re talking about Supreme Court precedent (and as noted before Heckler isn’t applicable here), take a look at Youngstown Sheet & Tube v. Sawyer, which stopped Truman from taking over steel mills.

Dan Tanna on November 18, 2013 at 4:05 PM

Why don’t you save us plebes some work and summarize it?

slickwillie2001 on November 18, 2013 at 4:52 PM

So, I’ve lost count of the flip-flops…
Is the WH still against the House bill {the morning after bill?} to implement what Obama said he wanted last Thursday?

socalcon on November 18, 2013 at 5:20 PM

Dem rep: I’m not sure Obama’s “fix” for canceled plans is exactly legal

Hmm, it appears to be ‘green lighted’ then.

socalcon on November 18, 2013 at 5:22 PM

mailmars on November 18, 2013 at 2:15 PM

Absolutely! Wasn’t there a guy being charged for illegal discharge of a firearm (when he fired a warning shot in the air to ward off an invader), who tried to use the defense “but that’s what Joe Biden said to do”. Anyone see how that worked out? Why would insurance companies expect a different result?

dominigan on November 18, 2013 at 5:27 PM

Legal, schmiegal.

talkingpoints on November 18, 2013 at 7:17 PM

Youngstown Sheet & Tube v. Sawyer, which stopped Truman from taking over steel mills.

Dan Tanna on November 18, 2013 at 4:05 PM

Truman tried to nationalize the steel mills to assure adequate steel production for the armed forces, but the Supreme Court would not permit it.

talkingpoints on November 18, 2013 at 7:20 PM