When the Administration flouts Obamacare and rule of law, can states sue?

November 11, 2015 | By ANASTASIA BODEN

A federal court says no.

The Administration has been ignoring many Obamacare provisions lately—largely because many Obamacare provisions are unpopular.

A prime example is the Administration’s decision to allow certain policies that were made illegal under Obamacare to continue to be sold.  Years ago, the President famously remarked, “if you like your health care plan, you can keep it.”  When that turned out to be untrue, the Administration sent out a letter stating that it would flout those provisions of the Act until 2016.  In other words, the Administration said it wouldn’t enforce that politically unpopular part of Obamacare until after the election.

The problem from the states’ perspective is that they are left holding the bag.  Under Obamacare as its written, states have the option of enforcing the ACA’s requirements for health insurance policies, and if they don’t, the federal government will step in and enforce those requirements for the states.  No matter what states choose, the federal government is going to enforce those requirements.  What the Administration has said now is that it won’t enforce those requirements, and instead it will leave the decision of whether to do so entirely up to the states.  In essence, the Administration has thrust all political accountability for the decision of whether or not to the enforce the unpopular minimum health insurance policy requirements onto the states.

West Virginia sued under the anti-commandeering doctrine—which prevents the federal government from coercing states into doing the federal government’s work.  That theory bolsters political accountability; if the federal government forces states to enforce federal law, the electorate won’t know who to hold accountable when it doesn’t like that law.  In this case, West Virginia argued that the Administration’s decision not to enforce the ACA’s ban on certain plans violated the anti-commandeering doctrine by forcing states to bear all political accountability for the decision of whether or not to enforce the ban—when in reality it is a federal law and the federal government should bear ultimate accountability for it.

The district court dismissed the case on the basis that West Virginia had not been injured, and therefore could not bring a lawsuit.  The opinion emphasized that the Administration is not coercing states to act in any certain manner—states have a choice between enforcing the law, or not enforcing it.  But West Virginia argued that the choice itself caused it injury because states have been forced to shoulder all of the blame for that choice.

As amicus, PLF had argued that the choice was in fact coercive.  If a state chooses to allow illegal policies to be sold within its borders, it gives up certain advantages under the Act.  For example, it forfeits its ability to set up a state exchange—and all of the related benefits.  Moreover, that choice subjects insurers to uncertainty about the legality of those policies.  Those policies are technically legal for the time being, but the Administration could change its mind and start enforcing the law (as written) at any time.  Because of these and other consequences, PLF argued that the federal government presented states with a “choice” so punitive as to be coercive.

Unfortunately, the court held that any injury that West Virginia suffered was too abstract for the state to sue over.  West Virginia has already filed a notice of appeal.  Until then, the Administration is free to ignore the ACA as written, and thus evade the consequences of it.