President Obama announced today that he will address the problem of millions of Americans losing their health insurance plans — contrary to what he repeatedly promised — by authorizing state insurance commissions to permit people to keep their plans for one year. State commissions aren’t required to do this; it will be up to them.
It occurs to me that this fix may well be illegal. The Obamacare legislation is quite clear about which insurance plans are grandfathered and which are not. Plans not in existence when Obamacare was passed are not grandfathered, naturally enough.
By what authority can the president permit plans not grandfathered or otherwise permitted by federal statute to be offered at the discretion of a state commission? Obama certainly didn’t cite any such authority, and I agree with Jeffrey Anderson that it’s not apparent where that authority would be found.
It also is not apparent that Obama has come with much of a fix. State commissions are permitted by Obama to grandfather insurance plans, but are not required to do so. Already at least one commissioner, Washington State’s, has expressed his disinclination to bless plans that don’t comply with Obamacare’s requirements. He noted, among other things, that Obama’s fix would de-stabilize the insurance market in his state.
Moreover, it is far from clear that plans already cancelled can be revived even if Obamacare would permit them to be. So millions of Americans may still be out of luck.
These are my preliminary thoughts. We will have more to say on this subject once we have had time to analyze it more closely.