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Sunday, November 17, 2013

Legal and Technical Trouble for Obamacare

At The Volokh Conspiracy, Jonathan Adler explains limitations of the president's "fix" to Obamacare:
It’s nice that regulators may forbear enforcing the relevant regulatory requirements, but this is not the only source of potential legal jeopardy. So, for instance, what happens when there’s a legal dispute under one of these policies? Say, for instance, an insurance company denies payment for something that is not covered under the policy but that would have been covered under the PPACA and the insured sues? Would an insurance company really want to have to defend this decision in court? After all, this would place the insurance company in the position of seeking judicial enforcement of an illegal insurance policy. If there’s an answer to this, I haven’t seen it [but see below]. It’s almost as if the Administration has not thought this through. As Sarah Kliff reports, this supposed “fix” creates a “big mess.”
The new policy announced by the President does not alter any of the PPACA’s legal requirements. Under the PPACA, only plans that meet various requirements are “qualified health plans” (QHPs). Only QHPs may be sold on exchanges or satisfy the minimum coverage requirement (the individual mandate). More importantly, under Section 300gg-6 insurers are barred from offering health insurance plans in individual and small group markets that do not include the essential health benefits package. This obligation remains. Would it affect the enforceability of such an insurance policies terms in private legal dispute in state court? It’s understandable if insurance companies will be in no rush to find out.
The Washington Post reports:
The Obama administration will consider the new federal insurance marketplace a success if 80 percent of users can buy health-care plans online, according to government and industry officials familiar with the project.
The goal for how many people should be able to make it through the insurance exchange is an internal target that administration officials have not made public. It acknowledges that as many as one in five Americans who try to use the Web site to buy insurance will be unable to do so.