Objection to Health Care Reform ‘Fix’ Nixed

(CN) — The D.C. Circuit upheld the president's decision to allow a transitional period in which insurers can continue polices not in compliance with the federal health care law.

Except for certain "grandfathered policies," the Patient Protection and Affordable Care Act initially included a requirement for individual health insurance plans to comply with eight market criteria if they began or faced renewal after Jan. 1, 2014.

The D.C. Circuit notes that "all hell broke loose," however, when millions of cancellations notices were sent out in fall of 2013.

Later that year, the Department of Health and Human Services announced that it would not enforce the requirements until Oct. 1, 2014.

Insurers were thus allowed to keep selling non-compliant plans that had been in effect on Oct. 1, 2013, as long as they informed affected customers of the noncompliance and of the health insurance exchanges that the Affordable Care created.

With this so-called administrative fix extended to Oct. 1, 2016, West Virginia brought a federal complaint alleging that the feds "encouraged" states to adopt the same transitional policy, leaving it to the states to enforce or not enforce the proposed fix.

"West Virginia believes that its citizens should be able to keep their individual health insurance plans if they like them," the 2014 complaint filed in Washington states.

Anticipating health care reform, the state says it had given insurance carriers "the option to permit early renewal for 2013 policyholders" so they could extend their current, possibly noncompliant plans through 2014.

West Virginia was not planning to "restrict the renewal of certain non-compliant plans for policy years that end by October 2017," saying it left it "up to the [insurance] carriers as to whether they want to offer non-compliant plans through that much longer period."

The state says the fix has "reduc[ed] the political accountability of the federal government at the expense of the states."

On Friday, the D.C. Circuit affirmed dismissal of the lawsuit for lack of standing.

"West Virginia conceded at oral argument that its claim of injury-in-fact is identical to that which would exist if Congress had initially provided that only states had authority to enforce the federal mandate," U.S. Circuit Judge Laurence Silberman wrote for a three-person panel. "It is claimed that if Congress were to do that, it would be illegally enlisting States to bear the responsibility, politically, to decide whether to enforce, or implement, a federal statute."

However, Congress gave the states the option to refuse to allow citizens to renew their noncompliant health insurance plans.

The state's "injury is nothing more than the political discomfort in having the responsibility to determine whether to enforce or not — and thereby annoying some West Virginia citizens whatever way it decides," Silberman said.

"And no court has ever recognized political discomfort as an injury-in-fact," he added.

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