The fix is not in.
One week later, states are still wrestling with whether to implement Barack Obama’s answer to the wave of dropped plans that greeted the launch of his signature health care initiative. The president’s “fix,” announced last Thursday in a somber news conference, allows insurance companies to renew policies that do not meet the minimum care standards of the Affordable Care Act (ACA), which go into effect on Jan. 1.
So far, only 13 states have said they will cooperate with the administration’s initiative, however, and some have refused. The debate has turned mostly on questions of actuarial policy. But the bigger problem states must consider is that the fix itself is unconstitutional. And even if the president did have the authority to take such action, state compliance with it would still break the law.
First, the fix exceeds the president’s discretion in implementing the law and amounts to legislation from the White House. The president has no constitutional authority to rewrite or unbundle statutes, especially in ways that impose new obligations on people, as the fix does.
But the Obama administration claims an “inherent authority to exercise discretion” in enforcing laws by not enforcing key parts of the ACA at all for one year. And how does argument that hold up? Not very well. Certainly, the chief executive has some discretion to decide how strongly to apply a law, and the timing of enforcement. However, complete non-enforcement of multiple statutes without any argument that they are unconstitutional certainly tests the limits of that discretion.
It is hard to think of anything more like broad policy than the central provisions of what has been called the most significant piece of legislation in a generation. Moreover, Congress is actively working on similar measures, but with differences the president considers objectionable. This further demonstrates the primarily legislative nature of the fix.The difference between executive discretion and rewriting a law can be blurry, but the latter can generally be characterized as involving broad policy, while the former involves particular circumstances that arise in the administration of a law. (To put it differently, enforcement discretion goes to how a law is implemented, not if.)
Indeed, far from mere “non-enforcement,” the fix imposes entirely novel requirements on insurers. Insurers have to make a variety of disclaimers and statements against interest to benefit from the non-enforcement. This is not a requirement found in the Affordable Care Act or its attendant regulations. The new requirements for insurers are highly detailed, showing this is thus not simply a delay, but substantive new regulation, adopted by dictate.
The second constitutional infirmity relates not to Congress, but the states. Unlike prior exercises of presidential enforcement discretion, the fix depends on states violating federal law. That is because it does not change the law on the books. Rather, the feds are simply signaling that they will not enforce certain provisions for some time.
But many parts of Obamacare do have to be applied by states, the traditional front lines of insurance regulation. States, however, lack “enforcement discretion” when it comes to ignoring federal law, even when the president thinks it would be a good idea. As the president has often reminded us, the ACA is “the law of the land,” and remains so after the fix.
The Constitution’s Supremacy Clause makes federal law—not presidential policies— binding on the states. So what’s a state insurance commissioner to do? Federal law requires health plans to have a mandatory level of “minimum coverage.” Thus it is not clear how a state insurance commissioner can authorize a plan that violates federal law. Such action would create a direct conflict between state action and federal law—and the latter automatically wins (even without the broad view of preemption of state laws that the administration has championed in immigration cases).
And the fix might violate state laws as well. Most states have passed “conforming legislation” that imports the ACA regulations into state law, so they can be enforced by state officials. But again, state governors—let alone state insurance commissioners—do not necessarily have the broad “enforcement discretion” over state law that Obama claims over federal law. Such sweeping non-enforcement might even be illegal under some states’ constitutional and administrative principles.
The incorporation of the ACA into state law also opens more possibilities for judicial challenge. While the Constitution limits standing to challenge non-enforcement in federal courts, state courts do not operate under these limits, and can potentially hear cases that would not make it into federal court.
President Obama’s fix, of course, only “encourages” states to go along with his plan, as the letter to state insurance commissioners puts it. The administration is only “encouraging” states to disobey federal law, in other words. This is something new. Even the radical and discredited states rights’ “doctrine of nullification” only allows states to ignore federal laws that they consider unconstitutional, not simply politically inconvenient.
Eugene Kontorovich is professor at Northwestern University School of Law, where he teaches constitutional law.
Read more: http://www.politico.com/magazine/story/2013/11/the-obamacare-fix-is-illegal-100254.html#ixzz2lPJz1VZ3
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