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Friday, November 15, 2013

Federalism and Obamacare

The president's Obamacare decision yesterday on health care is an example of federalism in action.  Louise Radnofsky writes at The Wall Street Journal:
Q: What just happened?
A: President Barack Obama said he wants to let insurance carriers keep selling policies that they earlier cancelled because they didn’t meet standards set by the 2010 Affordable Care Act. He said his administration would ask state insurance commissioners to permit insurance companies to make that move.
Q: Can Mr. Obama make this move on his own?
A: White House officials said the administration had the authority to make a temporary policy change of this kind. They cited as a similar example the president’s decision to defer the removal of immigrants who came to the country without authorization when they were children. Republicans said then the president might be overreaching his authority, and they sounded similar notes Thursday. “I am highly skeptical that they can do this administratively,” said House Speaker John Boehner of the move.
Q: Why do state insurance commissioners have to sign off?
A: Insurance is regulated by the states, and the state commissioners had already approved the plan cancellations. They have final say over whether plans are reinstated.
Q: Will insurance commissioners agree?
A: That’s hard to tell right now. At an earlier stage of the debate, some insurance regulators took a dim view of carriers trying to keep policy holders on old plans, as the Journal reported in September. Others have signaled more enthusiasm and one, Dave Jones of California, has already been pushing big carriers in his state to let policy holders stay on their existing coverage a little longer.
But The San Francisco Business Times offers a caveat about California:
Jones also said he has no authority in state or federal law to require Covered California or health insurers in the state to follow the new policy that President Barack Obama announced this morning, which would encourage insurers to allow individual policyholders to continue in existing plans through 2014.
Earlier, the Affordable Care Act required insurers to cancel those plans if they weren't compliant with its regulations, unless they were in effect in March 2010 — when the ACA was enacted — and hadn't been altered since.
It's unclear at this point if Covered California will, or can, follow Jones' recommendation or if insurers like Anthem Blue Cross, Blue Shield of California, Kaiser Permanente and Health Net will follow the insurance commissioner's suggestion that they notify individual plan policyholders of the opportunity to extend current plans beyond Dec. 31 and through 2014. 
Sarah Kliff writes at The Washington Post:
It took about three hours exactly for states to start pushing back against President Obama's request that regulators allow insurance plans to offer current products in 2014.
Washington state insurance commissioner Mike Kreidler has announced that he will not allow insurance companies to do so.
"In the interest of keeping the consumer protections we have enacted and ensuring that we keep health insurance costs down for all consumers, we are staying the course," he said in a statement moments ago. "We will not be allowing insurance companies to extend their policies. I believe this is in the best interest of the health insurance market in Washington."
I covered the National Association of Insurance Commissioners for about two years really closely. ... One thing you quickly learn covering the NAIC is that it has a wing of really progressive, liberal insurance commissioners, about five or six regulators who regularly work together. Kreidler is without a doubt part of that camp and one of the most liberal insurance regulators in the country.
It does feel a bit weird to have one of the most liberal regulators be the first out of the gate to oppose Obama. At the same time, it also makes sense: What Kreidler is doing is a full-throated defense of the Affordable Care Act.