HHS suddenly finds ObamaCare exemptions for territories

posted at 1:21 pm on July 21, 2014 by Ed Morrissey

It’s amazing what the right motivation will do. After ObamaCare passed, the American territories worried that the mandates and insurer regulations would either force premiums to skyrocket or the markets to collapse. They lobbied for exemptions, but as late as last year HHS insisted that the law tied its hands. The statute bound all states to the law, and territories qualified as states:

hhs-1

Furthermore, as HHS reminded one territorial governor at the time, they initially lobbied for inclusion in ObamaCare:

hhs-2

Almost exactly a year later, HHS has changed its mind. After a “careful review” of the statute — which presumably didn’t happen when this letter went out last year — HHS has discovered that “State” really does just mean states after all, and not any other level of government (via Zero Hedge):

Last week’s burst of world disorder was ideal for a news dump, and the White House didn’t disappoint: On no legal basis, all 4.5 million residents of the five U.S. territories were quietly released from ObamaCare. Where does everybody else apply?

The original House and Senate bills that became the Affordable Care Act included funding for insurance exchanges in these territories, as President Obama promised when as a Senator he campaigned in Puerto Rico, the Virgin Islands and other 2008 Democratic primaries. But the $14.5 billion in subsidies for the territories were dumped in 2010 as ballast when Democrats needed to claim the law reduced the deficit.

As a consolation, Democrats opened several public-health programs to the territories and bestowed most of ObamaCare’s insurance regulations, which liberals euphemize as “consumer protections,” such as requiring insurers to accept all comers and charge the same premiums regardless of patient health. “After a careful review of the law,” said Health and Human Services in a 2012 letter, HHS granted the territories’ request to apply these rules “to the maximum extent permitted by law.” …

Laws are made by Congress, but all of a sudden last week HHS discovered new powers after “a careful review of this situation and the relevant statutory language.” For simplicity’s sake, the territories will now be governed by the “state” definition that excludes the territories for both the subsidies and now the mandates too. But the old definition will still apply for the public-health spending, so the territories will get their selective exemption after all.

What changed? In between last July and now, ObamaCare had a horrible rollout and terrible impact on insurance premiums here in the States. It went even more poorly in the territories, where prices skyrocketed in some cases — and in others, insurers simply pulled out. The markets there are smaller, and the health risks more pronounced, so community pricing and mandates to issue insurance either means everyone pays a lot more, or no one gets insurance at all. The latter is what resulted in the Marianas Islands.

However, HHS may be digging a deeper hole for itself in another sense. The Halbig case at the DC appellate court hinges on the definition of “state” in the statutory language. The sudden shift in HHS’ interpretation toward the literal sense of the word is in diametric opposition to its position in Halbig, which argues that “state” is more or less a generic term for government at any level. This position change comes too late to play into the Halbig decision expected any day now, but the Supreme Court may be very interested in this new interpretation if they decide to hear an appeal from whichever side loses.

Meanwhile, the rest of us are still stuck with ObamaCare, even though we’ll be seeing price spikes in insurance across the board in the next couple of months.


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The administration doesn’t want $2500 savings per family each year?

rogerb on July 21, 2014 at 1:24 PM

Too late!!

Guam already has capsized Mother Effers!!!

ToddPA on July 21, 2014 at 1:25 PM

The administration doesn’t want their insurance to be stronger, better and more secure than it was before. Full stop. That’s it?
 
The administration wants them to have to worry about everything else?

rogerb on July 21, 2014 at 1:26 PM

This position change comes too late to play into the Halbig decision expected any day now, but the Supreme Court may be very interested in this new interpretation if they decide to hear an appeal from whichever side loses.

This would be the same Supreme Court that allowed the administration to argue Obamacare was not a tax on a Tuesday and that it was indeed a tax the very next day, right?

Happy Nomad on July 21, 2014 at 1:26 PM

This sounds to me like a violation of the 14th Amendment. This isn’t equal protection under the law.

KosherPickle on July 21, 2014 at 1:27 PM

The administration doesn’t want to bend their cost curve and start to reduce costs for their families, businesses, and government?

rogerb on July 21, 2014 at 1:28 PM

Meanwhile, the rest of us are still stuck with ObamaCare, even though we’ll be seeing price spikes in insurance across the board in the next couple of months.

Not exactly. We could always try for a state to revert to a territory and then move there.

nobar on July 21, 2014 at 1:32 PM

When is that decision due out? We’ve been hearing about it so long it is going to be anti-climatic when it comes even if it goes our way.

I doubt it is going our way. Things seem to be trending in Obama’s favor again in the media.

They just can’t keep up the scrutiny. They love him too much.

petunia on July 21, 2014 at 1:33 PM

So, now “the states” means just the states. How about DC? It do get confusing, don’t it?

Surellin on July 21, 2014 at 1:33 PM

So the administration wants to restrict choices, impede competition, and increase costs for millions in the territories?

rogerb on July 21, 2014 at 1:34 PM

However, HHS may be digging a deeper hole for itself in another sense. The Halbig case at the DC appellate court hinges on the definition of “state” in the statutory language.

Yes we are officially in Alice in Wonderland territory: “When I use a word,’ Humpty Dumpty said in rather a scornful tone, ‘it means just what I choose it to mean – neither more nor less.”

rbj on July 21, 2014 at 1:34 PM

So, now “the states” means just the states. How about DC? It do get confusing, don’t it?

Surellin on July 21, 2014 at 1:33 PM

Good point.

ladyingray on July 21, 2014 at 1:39 PM

No worries, Oblahblah will just use his pen to rewrite the law so the Supreme Court is able to side with the Government.

Meople on July 21, 2014 at 1:43 PM

The administration doesn’t want $2500 savings per family each year?

rogerb on July 21, 2014 at 1:24 PM

Obama hates brown people.

faraway on July 21, 2014 at 1:43 PM

The latter is what resulted in the Marianas Islands.

FIFY

GWB on July 21, 2014 at 1:44 PM

What about Commonwealths?

Flange on July 21, 2014 at 1:46 PM

In at least 8 states the rates will go up by among 15-25%, ahead of Nov.

liblikeaslave to rejoice.

Schadenfreude on July 21, 2014 at 1:47 PM

Any updates on the Territories emcompassing
the Louisiana Purchase??

ToddPA on July 21, 2014 at 1:52 PM

However, HHS may be digging a deeper hole for itself in another sense. The Halbig case at the DC appellate court hinges on the definition of “state” in the statutory language.

 
I’m just glad nothing like that could happen when they wrote the text determining my coverage. I bet that would probably be like Hobby Lobby wanting to limit… Wait, what do you mean that was the same law?
 
Then the same geniuses were responsible for writing that part, too, weren’t they?
 
Oh, crap.

rogerb on July 21, 2014 at 1:52 PM

The beauty of the Democrat mind is that all words have specific meanings. However, those meanings are determined by Democrats at that specific point and time and can change as needed, interchangeably, to meet Democrat needs, back and forth from second to second.

Kinda like Obamacare. It’s a tax, except when its not.

It’s all very confusing to people with common sense.

Closet Optimist on July 21, 2014 at 1:55 PM

So Nancy wasn’t kidding when she said we had to pass it to see what was in it….

…Taking the EpicClusterFarkNado to entirely new levels of EpicClusterFarkedness…..

Athos on July 21, 2014 at 1:56 PM

This sounds to me like a violation of the 14th Amendment. This isn’t equal protection under the law.

KosherPickle on July 21, 2014 at 1:27 PM

Where’s one of our ghey trolls to opine on this? They always seem to be experts on the magical powers of the 14th Amendment.

#gheythread

#BuckFarack

Nutstuyu on July 21, 2014 at 1:56 PM

This position change comes too late to play into the Halbig decision expected any day now….

Not really. Since the decision hasn’t issued yet, they could bring this to the court’s attention by filing a notice of supplemental authority.

Syzygy on July 21, 2014 at 1:56 PM

This would be the same Supreme Court that allowed the administration to argue Obamacare was not a tax on a Tuesday and that it was indeed a tax the very next day, right?

Happy Nomad on July 21, 2014 at 1:26 PM

That’s the benefit of passing a magic law like Obamacare.

The O-Care penalty is a tax when Obama needs it to be a tax, and it’s not a tax when he needs it not to be a tax.

And a place is a state when Obama needs it to be a state, and it’s not a state when he needs it not to be a state.

O-Care is whatever Obama wants it to be on any given day, and it can morph and change based on nothing more than Dear Leader’s whims.

It’s so very . . . progressive.

AZCoyote on July 21, 2014 at 2:04 PM

This is probably bad news with regard to the upcoming Halbig decision. My guess is that HHS has information that Halbig is going their way, and that’s why they’re not worried about putting out this definition of “State” at this time.

Sounds paranoid, I know, but then again, look at who we’re dealing with.

IrishEi on July 21, 2014 at 2:07 PM

How hard would it be for my state to get our status changed to Territory?

Losing our representation in the House and Senate might not be such a great loss, compared to the burden imposed on states by the Feds. It would certainly be worth weighing on the cost/benefit scales.

s1im on July 21, 2014 at 2:08 PM

The Halbig case at the DC appellate court hinges on the definition of “state” in the statutory language. The sudden shift in HHS’ interpretation toward the literal sense of the word is in diametric opposition to its position in Halbig, which argues that “state” is more or less a generic term for government at any level.

Not to worry, it’s nothing that can’t be rewritten by the Chief Traitor to the Constitution, John ‘Benedict’ Roberts.

RJL on July 21, 2014 at 2:12 PM

Clusterfark from day 1

rjoco1 on July 21, 2014 at 2:19 PM

The nice thing about the “ObamaCare law” is that King Barack can “change the law” any time he likes.

He found the authority in the Constitution somewhere.

GarandFan on July 21, 2014 at 2:21 PM

Sorry – unconstitutional. Obama just used his pen to destroy his legacy legislation to score a few political points.

The federal government CANNOT write law specific to one state or states. The laws must apply uniformaly or not at all.

Shut it down. Shut it all down.

Skywise on July 21, 2014 at 2:22 PM

Leg rustler’s and tonsil robbers are on the loose in Puerto Rico and Guam.

By the way…you know who has a vested interest in ObamaCare not being the law in the territories?

Can you say Pelosi?

BobMbx on July 21, 2014 at 2:23 PM

Secession and reconquest as territories may be an answer here.

formwiz on July 21, 2014 at 2:36 PM

Is there a process to upgrade from a State to a Territory?

malclave on July 21, 2014 at 2:37 PM

L’etat? C’est lui!

jdpaz on July 21, 2014 at 2:38 PM

HHS: Havin’ mah haggis an’ eatin’ it too!

Marcola on July 21, 2014 at 2:39 PM

Crap! At first I thought the headline read “HHS suddenly finds ObamaCare exemptions for terrorists,” and I thought, “not surprised.”

MisterElephant on July 21, 2014 at 2:45 PM

Exemptions please for the Commonwealths of Massachusetts, Virginia, Pennsylvania, and Kentucky; not to mention the Republic of Texas!

PackerBronco on July 21, 2014 at 2:46 PM

HHS suddenly finds ObamaCare exemptions for territories

When I first read that I thought it said: HHS suddenly finds ObamaCare exemptions for terrorists.

And I wasn’t particularly surprised.

After a “careful review” of the statute [...]— HHS has discovered that “State” really does just mean states after all….

Words mean whatever they want them to mean at any given moment.

V7_Sport on July 21, 2014 at 2:47 PM

The beauty sickness and ugliness of the Democrat mind is that [snip]
Closet Optimist on July 21, 2014 at 1:55 PM

Corrected for accuracy.

MisterElephant on July 21, 2014 at 2:48 PM

The federal government CANNOT write law specific to one state or states. The laws must apply uniformaly or not at all.

Skywise on July 21, 2014 at 2:22 PM

Your premise is wrong, since the territories aren’t states. And, even though they can’t write laws that only apply to one state, they most certainly can write laws that apply to categories: states, territories, federal districts, etc. The ACA isn’t unconstitutional for that reason. (It’s plenty unconstitutional for other reasons.)

GWB on July 21, 2014 at 2:49 PM

MisterElephant on July 21, 2014 at 2:45 PM

V7_Sport on July 21, 2014 at 2:47 PM

LOLOLOLOLOLOLOLOLOLOL!!!!

MisterElephant on July 21, 2014 at 2:51 PM

Your premise is wrong, since the territories aren’t states. And, even though they can’t write laws that only apply to one state, they most certainly can write laws that apply to categories: states, territories, federal districts, etc. The ACA isn’t unconstitutional for that reason. (It’s plenty unconstitutional for other reasons.)
GWB on July 21, 2014 at 2:49 PM

They already declared territories as “states” and forced them to implement the law… They can’t change the definition halfway through.

THAT makes it unconstitutional.

Skywise on July 21, 2014 at 2:52 PM

IIRC, the tuna canneries whose HQs are in Nancy Pelosi’s House district are located in one of the territories, which is why the territories were exempted from the last round of minimum wage hikes. Could Nancy’s (and Barbara’s and Diane’s) fingerprints be on this decision?

catsandbooks on July 21, 2014 at 2:55 PM

It depends on what the meaning of “is” is.

Must have had Billy-bob read that statute?

txdoc on July 21, 2014 at 2:58 PM

Not to worry, it’s nothing that can’t be rewritten by the Chief Traitor to the Constitution, John ‘Benedict’ Roberts.

RJL on July 21, 2014 at 2:12 PM

…he must sleep well at night!

JugEarsButtHurt on July 21, 2014 at 3:13 PM

They already declared territories as “states” and forced them to implement the law… They can’t change the definition halfway through.

THAT makes it unconstitutional.

Skywise on July 21, 2014 at 2:52 PM

That’s not what you stated in the comment to which I responded. You took a position regarding what is essentially a bill of attainder against a state. That is what I was answering.

If you read the post above carefully, you’ll realize that the law did, yet didn’t, declare them states. In one section, they used a definition where they are states (from another law that already applied), while another section declared for its purposes they were not states (using the section actually in the ACA that defined “state”).

Now, that is what the law was written as – clear as mud, but at least it’s the dadgum law. And, it’s perfectly constitutional to write a law in that manner. The changes they are making now – and this goes to your point about unconstitutionality – are being made without the authority of law, and solely at the discretion of people who don’t have the cover of the law within which to act. THAT makes it unconstitutional.

GWB on July 21, 2014 at 3:43 PM

State really does mean state? Good. This should make the Halbig case a lot easier to decide. If state means states not territories then state exchanges must mean only state exchanges and not also federal exchanges, right?

HHS just served it up for you judge. Doesn’t get any easier.

beselfish on July 21, 2014 at 3:47 PM

Does this mean that State means State in Halbig V. Sebelius too?

Buckshots on July 21, 2014 at 4:04 PM

If supposedly everyone is happy with the ACA now that the website is (partially)fixed (perhaps), why are people still trying to climb out of the steaming pile of — ? Don’t they know what is good for them?

KW64 on July 21, 2014 at 4:07 PM

Well now the question is what is Ocare at all a idea in Obama’s head?? It sure as hell isn’t a workable ” law” as defined by this administration…

sorrowen on July 21, 2014 at 4:29 PM

“The original House and Senate bills that became the Affordable Care Act…”

Uhmmm, no. There is no original House bill that became the Affordable Care Act. The original House bill that became the Affordable Care Act was a Veteran’s Mortgage bill, and had nothing whatever to do with health insurance.

flyovermark on July 21, 2014 at 4:29 PM

The administration may have just shot itself in the foot. The court case from Oklahoma involves whether policies bought through the federal exchange qualify for subsidies. The fine print in the law says that the subsidies are only for policies purchased from state run exchanges, not the federal exchange. The administration is arguing that the term “state exchange” really means state or federal exchange. What is being done to exempt the territories relies on state meaning just state. This is the opposite of what the administration is arguing in the Oklahoma case. I hope the Oklahoma attorneys are savvy enough to bring this up.

bartbeast on July 21, 2014 at 6:08 PM

HHS has discovered that “State” really does just mean states after all, and not any other level of government

Therefore, they admit that the Federal exchanges are NOT “State” exchanges.

Troy Rasmussen on July 21, 2014 at 7:03 PM

I’m confused.

So “state” means “only states”.

However “state exchanges” also mean “Federal exchanges and NOT only state exchanges”.

So wouldn’t “state” mean “federal”… therefore the country, and every territory?

Man, they make the language do a LOT of work when they’re writing and interpreting laws.

State – meaning a single State, or the Federal Government as a whole, but NOT territories in particular…

Um… is D.C. a “state” for the purposes of the language in the bill? Or is it sometimes yes and sometimes no and we’ll have to get back to you once we decide what the law means?

gekkobear on July 21, 2014 at 10:33 PM

Wow. Moving to The U.S. Virgin Islands never looked so good.

Theophile on July 22, 2014 at 12:29 AM