Tag Archives | ACA

The Obamacare Fix’s Legality, State Law and Standing

I have a piece in POLITICO discussing the constitutional problems with the ObamaCare fix, which have been previewed here before. One aspect is whether state officials can ignore ObamaCare and instead apply “The Fix.” Regardless of the discretion President Obama has, state officials do not have enforcement discretion over federal law. It is just supreme, and even if the president ignores it, state officials can not.

Unlike prior exercises of presidential enforcement discretion, the fix depends on states violating federal law. That is because it does not change the law on the books. Rather, the feds are simply signaling that they will not enforce certain provisions for some time.

But many parts of Obamacare do have to be applied by states, the traditional front lines of insurance regulation. States, however, lack “enforcement discretion” when it comes to ignoring federal law, even when the president thinks it would be a good idea. As the president has often reminded us, the ACA is “the law of the land,” and remains so after the fix.

The Constitution’s Supremacy Clause makes federal law—not presidential policies— binding on the states. So what’s a state insurance commissioner to do? Federal law requires health plans to have a mandatory level of “minimum coverage.” Thus it is not clear how a state insurance commissioner can authorize a plan that violates federal law.

But state officials may encounter the ACA in different ways. In some states, it will have the general preemptive force of federal law. So states that authorize non-compliant plans pursuant to the Fix would be in conflict with federal law.

A more interesting scenario involves states that have passed “conforming legislation” to “domesticate” the ACA to make it more convenient to enforce. In such states, the ACA is both federal and state law, and at the [...]

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The Inconsistency Between the Constitutional Arguments for the Mandate and Medicaid in the ACA

Now that Eugene has given me the electronic keys to this Conspiracy, I could not resist getting involved in the now-legendary discussion of the ACA…

There is a serious inconsistency between the government’s arguments for the mandate and for the Medicaid expansion. In a nutshell, these arguments make opposite assumptions about the effect of financial duress on states’ ability to execute their policy preferences. Defending the mandate, the government says states are individually incompetent to regulate insurance, because the first state to adopt generous rules would be inundated with the sick, and forced to abandon its policy. This is a basic race to the bottom story and has been around in Commerce Clause cases since the New Deal.

Crucially, the argument takes financial realities as dispositive: states cannot realistically choose to experiment with medical insurance individually because it would be ruinous. The economic effects mean that states do not really have the power to choose individual regulatory regimes.

Yet turning to the Spending power, the government ask us to believe that states can realistically turn down federal medicaid funds, though it would be at least as ruinous if not more. Either the prospect of massive losses makes a states ability to pursue a certain course illusory or it does not. 

Incidentally, these two cases are not equal in that in that in the former, the ruinous consequences are a result of the market, in the latter a result of calculated federal efforts to make the offer unrefusable. [...]

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