When Obamacare fails, the Executive can't blame states

November 13, 2014 | By ANASTASIA BODEN

As readers well know, the Affordable Care Act (ACA) imposes all sorts of new restrictions indexon the types of health insurance policies that can be bought and sold.  Naturally, this means that a lot of people who liked their health insurance plans can’t keep their health insurance plans—no matter what politicians promise.  The ACA has made those plans illegal, forcing insurers to take the nonconforming plans off the market.

Soon after these regulations went into effect, the Executive Branch realized that they were very politically unpopular.  But rather than repealing the law, or even urging Congress to formally change it, the Administration decided it would just ignore those inconvenient provisions instead.  And so the President announced that the Federal government would no longer enforce the restrictions on health insurance policies, and instead leave it up to the states to decide whether or not enforce them.

The problem is, in so doing, the President has transferred all political accountability for the ACA’s weaknesses on the states—and states don’t want to take the blame for the ACA’s pitfalls.  West Virginia has sued, alleging such a transfer of political accountability violates the Tenth Amendment.  And Today, Pacific Legal Foundation filed this brief in support of the state.

The Federal government had argued that states like West Virginia don’t have standing to sue because they are not injured by the Administration’s actions.  PLF argued that though framed as a free “choice” over whether to enforce Federal law, the Administration actually forces states to choose between enforcing the law or suffering four coercive penalties.  First, if a state chooses not to enforce Federal law, it forfeits its right to set up it own state-funded exchange—which we know now, in turn, may force states to sacrifice Federal subsidies.

Second, even if a state chooses not to enforce the Federal regulations, non-conforming policies remain illegal under Federal law.  Recall that the insurance regulations were never repealed; the Federal government has merely promised not to enforce them—a promise that can be changed at any time. Thus insurers and consumers who buy and sell non-conforming policies are left in a legal grey zone, and state courts will eventually have to determine the ultimate legality of those policies.

Third, the Administration has shifted all political accountability for the changes imposed by the insurance regulations onto the states.  Whereas under the ACA, states could choose whether or not to enforce the laws without fear of voter reprisal (because the Federal government was going to enforce them no matter what), now the choice over and responsibility for enforcement has been thrust upon the states.

Finally, states that do not enforce the federal laws are harmed because they are preempted from being able to implement their own laws governing insurance regulations, and yet they are left with no federal substitute.  By refusing to enforce the Federal regulations, the Administration has effectively created a hole in regulation that states cannot fill.

The Executive’s decision not to enforce the insurance regulations is just one in a long list of exemptions the Branch has permitted when its own law has turned out to be politically unpopular or bureaucratically unfeasible.  According to some counts, the President alone has made at least 24 revisions to the law.  While the Executive always has some degree of enforcement discretion, and Congress is always free to amend laws through the normal lawmaking process, both must do so in a way that satisfies statutory procedural requirements and the Constitution.