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Obama’s fix: Is it legal?

I continue to believe that President Obama’s “fix” is unlawful. To be more precise, the renewal of non-compliant health insurance is illegal, notwithstanding the administration’s decision not to enforce the requirements of the Obamacare statute. And the president lacks the power to refuse to enforce these statutory requirements.

A tricky issue arises, however, over the question of who has standing to sue over the fix. Purchasers of insurance plans arguably have no standing because they aren’t harmed. They can take advantage of the fix or not, as they choose.

Insurance companies too have a choice, as I understand it. I don’t believe they are required to revive cancelled plans.

Nonetheless, my preliminary take is that insurance companies will have standing to sue if they can show that Obama’s fix has produced market effects that adversely affect them. And it seems likely that the fix will produce such demonstrable effects.

Under this theory depending on the facts, an insurance company might have standing to sue another insurance company for selling non-compliant plans. But the selling by a particular company of non-compliant plans is unlikely in itself to cause harm to the market.

The real harm stems from the government’s decision to countenance violations of the law — that is, to not enforce the statute. An insurance company could claim standing to sue the government on that basis.

The government could respond that its “enforcement discretion” permits it to countenance the selling of non-compliant plans for a year. This may or may not be a good argument — personally, I would reject it. But, depending on the facts, insurance companies may be able to litigate the question based on standing that results from injury to the market in which they operate.

That, at least, is how it seems to me on first blush.

Whether an insurance company would want to take on the government is another question.

NOTE: I have edited this post since originally posting it.

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