Is the fix legal?

By Christopher Robertson

Over at the Volokh Conspiracy, Jonathan Adler has a quick take on whether President Obama has legal authority for his decision to allow non-compliant health insurance policies to remain in effect.  The White House has suggested that this is merely a routine question of enforcement discretion, just like prosecutors use everyday.  (See e.g., AZ v. US, affirming this power under the immigration laws.)

Professor Adler asks, “Does this make the renewal of non-compliant policies legal?”  And he at first answers, “No. The legal requirement remains on the books so the relevant health insurance plans remain illegal under federal law.”  Adler suggests that this illegality may become important if, for example, a patient were to make an insurance claim under a non-compliant policy for a procedure that would have been covered under a compliant policy.  Adler suggests that the Affordable Care Act (ACA) would force coverage, regardless of what President Obama says.

At the end of the post, however, Adler adds an update, which comes around to what I think is probably the better analysis.  Under the Affordable Care Act,  only compliant plans “may be sold on exchanges or satisfy the minimum coverage requirement (the individual mandate). So the [ACA] does not expressly prohibit insurance companies from offering such plans (assuming they are allowed by state insurance commissions).”  Thus, they are not “illegal” in the first place.  [UPDATE:  Adler has updated his post a third time, citing 42 USC 300 gg-6, providing that insurers in the small group and individual markets shall ensure that such coverage complies with the essential health benefits package.]

In the end, the President’s new decision really does seem to be about declining to enforce the [proscription against these plans being offered] and declining to enforce the tax penalty on individuals that have non-compliant insurance policies.  He is saying that, as far as the Federal Government is concerned, “if you like your policy, you can keep it” (for now).

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