Is President Obama’s “Administrative Fix” Even Legal? Probably Not
The Imperial Presidency didn't start with Barack Obama, but his PPACA "fix" does much to expand it into questionable new territory.
As I noted yesterday, there are several questions regarding the proposed “administrative fix” that President Obama has announced in an effort to deal with the burgeoning numbers of people with individual health insurance plans who are finding those policies being canceled at the same time that it is still proving difficult for millions of people to go to the website(s) designed to host to Federal and state exchanges, get reliable and accurate information about what options are available to them, and sign up for a plan that they might be interested in. Additionally, many of these people report that when they are able to get online they find that they either end with higher premiums than they had before, or higher deductibles, both of which mean that they’ll be paying more out of pocket in the end. There’s also an open question about what impact this “fix” will have on the viable of the exchange marketplace in the long run, with many suggesting that it could send the entire system into a “death spiral” that will result in higher premiums than anyone expected.
While these are all legitimate questions, there’s one question that’s not being asked; namely, does the President even have the legal authority to do what he has proposed?
Law Professor Jonathan Turley doesn’t think so:
From Internet gambling to educational waivers to immigration deportations to health care decisions, the Obama Administration has been unilaterally ordering major changes in federal law with the notable exclusion of Congress. Many of these changes have been defended as discretionary acts or mere interpretations of existing law. However, they fit an undeniable pattern of circumventing Congress in the creation new major standards, exceptions, or outright nullifications. What is most striking about these areas is that they are precisely the type of controversial questions designed for the open and deliberative legislative process. The unilateral imposition of new rules robs the system of its stabilizing characteristics in dealing with factional divisions.
I cannot find the authority under the ACA to grant millions of Americans an effective waiver or delay. The White House will clearly defend this as simply an exercise of discretion in the enforcement of laws. There is certainly support in such claims, though they are controversial. I just published an academic piece the explores the constitutional problems with the expansion of the powers of the “fourth Branch.” See Jonathan Turley, Recess Appointments in the Age of Regulation, 93 Boston University Law Review ___ (2013) and Jonathan Turley, Constitutional Adverse Possession: Recess Appointments and the Role of Historical Practice in Constitutional Interpretation, 2103 Wisconsin Law Review ___ (2013). I also wrote a column on the subject for the Washington Post. I fail to see how the legislative process can have meaning if a president can effectively rewrite laws in the name of agency discretion. It is an argument that adds to the already dangerous concentration of executive power under this President.
This issue has nothing to do with the merits of the ACA. As with my criticism of Sebelius for the grossly negligent administration of the law, this is not about how one feels about the law. President Obama will leave a presidency that is dangerously unchecked and Democrats will be saddled with their support of those powers when they are claimed by a president less to their liking.
The Volokh Conspiracy’s Jonathan Adler expresses similar doubts:
According to the President’s announcement, insurance companies will be allowed to renew policies that were in force as of October 1, 2013 for one additional year, even if they fail to meet relevant PPACA requirements. What is the legal basis for this change? The Administration has not cited any. (See, e.g., this letter to state insurance commissioners explaining the change.) According to variouspress reports, the Administration argues it may do this as a matter of enforcement discretion (much as it did with immigration). In other words, the Administration is not changing the law. It’s just announcing it will not enforce federal law (while simultaneously threatening to vetolegislation that would authorize the step the President has decided to take).
Does this make the renewal of non-compliant policies legal? No. The legal requirement remains on the books so the relevant health insurance plans remain illegal under federal law. The President’s decision does not change relevant state laws either. So insurers will still need to obtain approval from state insurance commissioners. This typically requires submitting rates and plan specifications for approval. This can take some time, and is disruptive because most insurance companies have already set their offerings for the next year. It’s no wonder that some insurance commissioners have already indicated they have no plans to approve non-compliant plans.
Yet even if state commissioners approve the plans, they will still be illegal under federal law. [See clarification below.] Given this fact, why would any insurance company agree to renew such a plan? It’s nice that regulators may forbear enforcing the relevant regulatory requirements, but this is not the only source of potential legal jeopardy. So, for instance, what happens when there’s a legal dispute under one of these policies? Say, for instance, an insurance company denies payment for something that is not covered under the policy but that would have been covered under the PPACA and the insured sues? Would an insurance company really want to have to defend this decision in court? After all, this would place the insurance company in the position of seeking judicial enforcement of an illegal insurance policy. If there’s an answer to this, I haven’t seen it [but see below]. It’s almost as if the Administration has not thought this through.
Regardless of how one feels about the PPACA as a matter of policy, there ought be a serious concern about the prospect of a President who, rather than proceeding through Congress to obtain changes to laws that have proven to be problematic in one way or another, use the fall back of “Executive discretion” to create change on their own. This isn’t how it’s supposed to work, of course. What’s supposed to happen is that Congress passes laws and the President executes them. If it turns out that there are problems with the law, then it’s up to Congress to fix it. Given our current political environment, of course, the common response to this point will be that, because of the continual efforts of Republicans in the House to dismantle the Affordable Care Act, and the ability of the minority in the Senate to use that body’s rule to block legislation they disapprove of, the President has no authority to act on his (or her) own. However, while that may be a good explanation for why President Obama thinks he needs to act in this manner, it is not a sufficient legal justification for a President who acts outside of his Constitutional authority.
Moreover, in this particular case there was no need for the President act without consulting Congress in the manner that he has. Both the House and the Senate have been working on legislation that would deal with the very issue that the President seeks to deal with via Executive fiat. The House version, sponsored by Congressman Fred Upton, which actually passed the House today with the support of 39 Democratic Members of Congress, would allow, but not require, insurers to keep offering non-ACA compliant plans after January 1st. The Senate version, sponsored by Democratic Senator Mary Landrieu of Louisiana, would require insurers to keep offering those plans to people who are presently on them. There was also an alternative plan offered by House Democrats that many had characterized as a modified version of the Landrieu plan, as well as a separate plan offered by Senator Mark Udall of Colorado which is similar to Landrieu’s plan but only lasts for a period of two years. Arguably none of these plans are perfect, but the point is that there were alternatives out there that the White House could have worked with rather than engaging in the disturbingly all too common in recent decades practice of Presidential usurpation of what is, in reality, clearly properly the power of Congress.
Both Turley and Adler raise some interesting questions about how all of these could end up creating serious legal headaches in the year(s) to come. Where that will leave us is unclear at this point, but what is clear is that President Obama likely could have avoided what does come if he had decided to put his weight behind one of the proposals pending on Capitol Hill rather than deciding to take matters into his own hands. Sadly, in doing what he has done he’s merely following in the footsteps of far too many of his predecessors.
It should be exceedingly obvious that Congress will not pass a fix, pretending otherwise is pointless.
This is the natural outcome when one party in Congress refuses to legislate constructively. Repeal only means more administrative fixes, even if that isn’t ideal.
@David M:
The House *did* pass a proposed fix. You may not like it, Obama may not like, and as I admit above it is far from perfect. But they did pass something. Obama was irresponsible for asserting authority he doesn’t have and ignoring regular order.
But, again, I will admit that he is not the first President to do this, and he won’t be the last. Unfortunately.
I’ve read Landrieu’s bill and it looks like crap to me. There are so many ambiguities and questions, that it appears to be more a letter of intent than an actual act of legislation. Also, it doesn’t explain how it would be enforced against insurance companies, particularly if they acted legally under state law and under the policies. Can Congress give me a right to perpetual renewals of my cable bill?
Obama, the liar, promises not to take administrative action against insurers who wish to offer very narrowly defined but still illegal plans. But earlier he claimed no ability to influence how the IRS executes tax law?
@Doug Mataconis:
I don’t disagree that the House or the Senate each could pass a fix, but Congress won’t pass a fix. Upton’s plan should be evidence of that, as it’s being sold as part of the repeal effort, not an actual fix.
@David M:
Actually the Senate has not passed anything yet. They took today off.
And, again, my point isn’t to endorse any of these bills as the perfect answer. The point is that the proper procedure under the Constitution is not being followed.
The difficulties the US gov’t has in cooperatively legislating is a complex situation and Presidential power vs congressional prerogatives do indeed make up a part of it. (Something that parliamentary systems don’t have to deal with, I’d point out.)
But this is not a new issue. The early American gov’t was wracked over a similar controversy because there was no Constitutional authority for the Louisiana Purchase nor for the granting of citizenship to the people there. Somehow we’ve stumbled along.
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Poor lib losers have their panties in a bunch because the scumbag-in-chief won’t get bailed out by everyone he called greedy, corrupt and a terrorist. Boo-effing-hoo little crybabies
@bandit:
I thought you’d be celebrating the fact that your ongoing obstruction of everything Obama does is yielding the results you wanted?
Perhaps, Mr. Obama’s “fix” is merely “undocumented” not “illegal.”
Yeah. These policies will just sneak in from Mexico or Canada.
Apparently, Obama is planning on creating a slush fund to cover insurer losses from this “Executive discretion”. The government employees signing those payments best be careful, Obama will be out of office before the statute of limitations runs out.
But Dems need to keep insurers happy, they control the timing of the cancellation letters and rate increases next fall.
@PD Shaw:
Remember my point about rules regimes vs. discretionary ones? It might be significant that Sen. Landrieu comes from a state in which the Civil Code tradition runs stronger then the common law one.
The problem is that few people are enrolling, especially the young, healthy, and restless. Threats and penalties don’t work. Period. Solution: offer incentives instead of penalties and threats from the IRS. If they owe taxes, their bill is wiped clean. Period. If they sign up, they will be exempt from paying any federal income taxes ever again as long as they stay enrolled. Period. Then watch millions and millions of the young, healthy, and restless sign up. Problem over. Period.
And that is my solution. I would like to hear yours.
“I fell in to that burning ring of fire. I went down, down, down, and the flames went higher.” (Cash)
@Tyrell:
Getting more people to enroll is fairly easy. Either increase the subsidies, increase the penalty or add a more affordable public option. Ideally it would be a combination of all 3.
Somehow this turned into an emergency. Remember the first rule about emergencies.
subsidies, aka, money from the federal budget
penalty – legally, a tax – a tax that SCOTUS ruled if it becomes significant is unconstitutional.
public option – there’s that pesky federal budget again
@JKB:
Pretty sure a combination of those can be arranged that won’t cause fiscal problems.
Anyway, probably one of the larger mistakes the Democrats made was having health care reduce the deficit as much as it did. The GOP just lied about it anyway, and it made the implementation more painful for some people than it needed to be. This would be a chance to fix that mistake.
@Tyrell:
Great ideas. How about a free car and a pony too?
@David M: A lot of people will not be affected by the penalty. The penalty is only collectable if you are getting a refund. A lot of young people either do not get a refund because they do not pay enough taxes in to qualify, or they are unemployed.
“I am sorry [name your favorite Democrat], I’m not going to be put into a situation based on the sorry-assed assurances you have given me”
@David M:
Well the major issue is that there is a binding federal law called the PPACA. It requires certain stated plans to be cancelled because they do not meet the minimum standards of the federa law. For an insurance company to rewrite one of these “substandard” policies- they are in violation of federal law. Obama did not offer “amnesty” for Insurance companies for deliberately violating federa law. And even if they rewrite these policies, it is only kicking this debacle down the road to when Obama decides to enforce the law of the land. This was strictly a politicaly expedient move on the part of Obama. There is no real constitutional argument that allows a president to cherry pick which part of duly enacted laws he will decide to abide by. These actions by Obama is opening a horrible pandoras box that could help destroy our constitutional republic.
Certainly those in Congress could try to impeach and remove him from office…or even try to work with him to try to fix ACA…of course the latter is asking far too much of people beholden to the Teahadists…
@David M:
Let’s see, two elements would result in increased expenditures and one is limited in how much money it can extract by the Constitution. Good luck finding some combination that is deficit neutral.
Oh, and it requires new legislation, which means Obama and Harry Reid would have to be reasonable and compromise with the House.
@An Interested Party: Certainly those in Congress could try to impeach and remove him from office…or even try to work with him to try to fix ACA…of course the latter is asking far too much of people beholden to the Teahadists…
Hey, libtard: the House passed, with 39 Democratic votes, a bill that takes Obama’s extension and writes it into law. Harry Reid says it will never come to a vote, and Obama says that he’d veto it anyway.
@Tyrell: “And that is my solution. I would like to hear yours.”
Having read your solution, mine is that the attendants never allow you near the ward computer again.
@Jenos Idanian #13:
“The U.S. House approved, in a 261-157 vote Friday, a GOP proposal to allow insurers to continue offering health care plans to new and existing customers through next year, even if the plans do not meet new federal requirements”
http://www.usatoday.com/story/news/politics/2013/11/15/house-cancelled-plans-bill/3576071/
I think the word “new” in there could be construed as an attempt to ensure a death spiral occurs.
@Jenos Idanian #13:
Given that the GOP are on record as describing the Upton bill as part of their repeal effort, it seems odd that anyone who wasn’t recently hit in the head repeatedly would claim that Obama’s administrative fix is the same. It’s just transparent nonsense and an attempt to distract everyone from the fact that the GOP are equally if not more responsible for the current clustef*ck and still don’t have an alternative health care reform plan.
Reminder, the GOP are the ones who decided we needed a large federal exchange.
@Jenos Idanian #13: Figures you would crow about such a disingenuous piece of legislation that would do nothing to help fix ACA but would certainly help to undermine it…of course, I should expect no less from some deadbeat who, in the past, failed to pay his own health care bills…
@Ron:
At some point the GOP can choose to pass routine adjustments and minor improvements to the law again. Until they decide to act responsibly, the options are no fixes or administrative fixes like this, and it’s an entirely predictable result of their juvenile opposition.
This actually applies to a whole host of issues, where the GOP is unwilling to allow problems to be fixed with legislative actions. Eventually the executive will choose to do something rather than nothing. Seems like the reason these administrative actions are required is more of a concern than the actions themselves. Our system does not work without compromise.
@An Interested Party: Well the presidents actions haven.t reached the high crimes and misdemeanor needed nor would the socialist controlled senate under Reid even consider impeachment.
How does one fix something so horribly flawed as Obamacare.?? It was promised to cost $985 billion over 10 years and now the cost fore the same time is $2.6 trillion and counting.
It has arbitrarily set what is acceptable levels of insurance and instead of saving the “average family” $2,500 a year in premiums, the majority are seeing rate hikes anywhere from 30-200%
Because of the arbitrary standard of acceptable insurance many small businesses who struggle to stay profitable and keep as many employees as possible are forced to dump their health plans because they cannot absorb the rate increases.
Medium size businesses are putting more and more people part time to stay under the 50 person threshhold because of the enormous rise in insurance costs Obamacare has forced on them.
They are now finding that more and more yonger people are opting for the $95 fine instead of paying high premiums to help subsidize the elderly who use insurance far more than the young do.
It is a socialist nightmare that was doomed to fail ( and even many liberals think this) to force the nation into single payer.
Think about that for a minute. Medicare is broke, social security is broke, the government has a $17 trillion dollar debt and $90 trillion in unfunded liabilities, it spent $634 million and 3 1/2 years and they couldn’t get a web site to work, sned out over $1 billion dollars in tax returns to people lwho have been dead for years or are not even citizens and not even living in America. Do you really want to trust them with running your health care???
@David M:
Welif you look back at the debacle that forced the govt. shutdown, you will see that the GOP led house was the only part doing any compromise. Sure they started with their goal of repeal, but in the end they passed new legislation authorizing a year delay in the personal mandate (legally I might add). No the house was ready, willing and able to compromise but Reid and Obama were the obstructionists especially Reid. He wold not even take up any one of the several bills passed by the house to reopen govt. and modify Obamacare. No matter how frustrated a president might get- he is not allowed by law to alter any law of the land unless it is deemed by budget people to be unable to fund.
Sorry this whole mess is on the dems. That is why Obama broke federal law 3 times (the PPACA established settles law of the land) and why their are cases working their way through federal court. That is why Obama took the iollegal action he did- it was purely a political act to save the skins of dems in the 2014 election. Every one except the most lowest info voters knows this to be true. Even the dems knew this which is why there was a 39 person rebellion in the house to vote with the gop to pass the “If you like your insurance, you can keep insurance” bill.
@Scott O: Well, a free car would be nice, and if it was electric that would fit right in with the energy policy.
As a child I had bad experiences with ponies. They are pretty and charming, but love to kick and bite.
Ignoring the legally ignorant partisan caterwauling which is the prior comments, I’ll take issue with Doug’s conclusion and the support from the Conspiracy’s Adler and Turley.
Because the intent of the Administration is not to “refuse to enforce a statute it opposes” but to “value administrative priorities in deciding how to enforce a bill it supports”, case law is solidly on the Administration’s side in delaying enforcement for one year.
If you want a very recent comparison on the exact same law (and an example of why this blathering is partisan-driven, not legally-based) none of these lawyers raised a peep in the summer when the Administration announced a one year delay in the employer-mandate.
@Tyrell:
Unemployed or low earners are exactly those that would benefit with Obamacare. They should be the ones most interested in enrolling
@Doug Mataconis:
It’s fair to point out that there, theoretically, perfectly constitutional means of correcting any perceived deficiency in the law, but it is either sloppy or cynical to characterize GOP House efforts to date as “a proposed fix.” You’ve got to ignore a lot of history to get to a “neutral” position on the House bill, and, really, to what end?
@Ron:
Not only is it not broke, the Democratic Party are the ones making sure it is there in the future with Obamacare, fixing some of the financial problems caused by the GOP and Medicare Part D.
Only if by broke, you mean able to make scheduled payments for 20 or so years at least.
Meaningless blather, meant to scare the rubes. Apparently mission accomplished.
Somewhere between not true at all and not really accurate enough to be useful.
You can’t possibly be that clueless.
That’s a flat out lie.
This is why we can’t have nice things, the Republicans have convinced their voters to believe nonsense.
@SKI:
I’m sincerely interested in an explanation for this, because it strikes me as a distinction without a difference.
@ David M
These are the same folks that keep saying the government is broke because of the national debt. They seem to be unaware of the rather substantial assets the federal government controls, and the existence of something called a balance sheet.
@An Interested Party: I realize that you would obviously favor the route of “the law is whatever Obama says it is today,” but it ain’t supposed to work like that. If you want to change the law, you change the law — you don’t just get the president to announce that it now means something different because The President Has Spoken.
@Mikey:
It is the test set out by the Courts to determine whether they should prevent an executive agency discretion in how they expend enforcement dollars.
Let me try to put it in relatable terms. It is clearly illegal to speed but no Court is going to require the police to ticket everyone going 2 or 3 miles per hour above the speed limit. Deciding not to enforce that portion of the law is within the police’s discretion as they are not seeking to nullify all speeding laws but merely determining how best to use agency budgets and resources. That isn’t a perfect analogy but I hope it makes clear that Courts are going to defer to Agency determinations on how to expend resources as long as the agency isn’t trying to do away with the law at all.
Another recent case: CMS announced that they are not going to enforce the two midnight rule for determining whether a patient should be an inpatient admission or an outpatient observation case for another three months. They are using their discretion to delay enforcement because the impact of immediate enforcement would be confusing and painful for patients and providers.
In the instant case, the Administration has announced it won’t enforce the federal prohibition* on these policies for another year because it will cause people too much confusion and frustration. That type of delay is fairly routine – just not on such politically sensitive areas.
*Note that this isn’t the only step that will have to be taken to make such policies still available. State Insurance commissioners will have to approve them (WA said it won’t, CA says it will) and insurance companies would have to rescind the terminations (likely for those not participating on the exchanges in that state, unlikely for those that are).
@SKI:
Well unfortunately the PPACA law is quite specific. The enforcement MUST take place at date certain not at some undefined time. So the president is bound by constitutional mandate to uphold the law. Once again if the law did not have specific dates when certain actions must go into effect, then the president does have administrative flexibility, but the law clearly does not give him that. Also the waivers to unions and business were also illegal and there are cases winding their way through the courts .
Oy, when will some conservatives stop pushing this claptrap that policies pursued by Democrats are “socialist”…this is the same problem that was addressed on this blog awhile back, how the president is referred to as “socialist” or “communist” and all of that is pure, unadulterated horse$hit…
I realize that you are full of $hit, as I’ve never written or implied that I believe that…if you want to make an argument, you could start it by not lying about what others believe…
@Ron:
That’s not exactly right, as there is always some leeway, even for dates. For some generic issue:
A delay of 6 months to work out “reporting requirements” to not unduly inconvenience people? Almost certainly OK.
A delay of a year, but they are still working towards implementing it? Probably OK
A delay of several years? Grey area. I believe delays like this have been successfully challenged in court in the past.
An indefinite delay or never implementing something? Not OK.
@An Interested Party: I realize that you are full of $hit, as I’ve never written or implied that I believe that…if you want to make an argument, you could start it by not lying about what others believe…
You didn’t have to say it. I don’t keep careful records of such things (I have a bit of a life), but I’m fairly certain that you approved of Obama’s unilateral postponement of the employer mandate, this postponement in question here, his choosing to ignore the War Powers Act in regards to Libya, his declaring Congress “in recess” to make appointments when Congress itself said it wasn’t recessed, and other examples where Obama has simply declared that the law means whatever he wants it to mean at that moment.
If I’m mistaken, please cite which of these examples you disagreed with Obama’s actions. I won’t ask you to cite proof; I’m willing to take your word for it. After all, we should at least try to be civil here…
Indeed…civil enough not to refer to people as libtards…
@Ron: lots of laws whose enforcement gets delayed have specific dates. You are stating what you want the law to be, not what it is. SCOTUS in Heckler v. Chaney (1985) set the standard: when an Administrative Agency is working to implement a law, it has incredibly broad discretion as long as it is working towards the statutory intent.
Given that the Obama Administration indisputably wants to see PPACA implemented, their discretion is going to be very broad.
Do you have any case law to the contrary? That when a law has a specific date in it, there is no enforcement discretion? I’d be shocked if you did.
At this point, it is almost expected that dates will get delayed in health care. Here was CMS delaying the start of the new 5010 billing standard (again): http://www.apta.org/PTinMotion/NewsNow/2012/3/16/Version5010/. ICD-10 has been delayed for years.
Also note that they already delayed another part if this law for a year (employer mandate) with few if any claims of unconstitutionality.
@An Interested Party: That was a direct response to “Teahadist.” If you’re gonna dish it out, don’t whine about taking it back.
@SKI: Also note that they already delayed another part if this law for a year (employer mandate) with few if any claims of unconstitutionality.
You don’t get out much, do you?
@Jenos Idanian #13: doesn’t change the case law authority.
@SKI: Thanks for the explanation. The administration’s action makes more sense to me now.
@Jenos Idanian #13: No whining here but you were the one talking about being civil…perhaps that’s as disengenious as that GOP bill you were touting…