(CN) - West Virginia failed to show that the government's delay in enforcing new health insurance requirements have injured it, a federal judge ruled.
When the Patient Protection and Affordable Care Act took effect, it initially required individual health insurance plans that started or faced renewal after Jan. 1, 2014, to comply with eight market criteria, unless the policies qualified for a "grandfathering" exception.
But after several non-grandfathered or noncompliant individuals and small businesses received cancellation notices from their insurers, the Department of Health and Human Services announced in late 2013 that it would not enforce the requirements until Oct. 1, 2014.
Insurers were thus allowed to keep selling noncompliant 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 "Obamacare" created.
With this so-called administrative fix extended to Oct. 1, 2016, West Virginia alleged in a federal complaint that the feds "encouraged" states to adopt the same transitional policy.
"West Virginia believes that its citizens should be able to keep their individual health insurance plans if they like them," the complaint filed last year in Washington states.
Anticipating Obamacare's enaction, 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.
Indeed, West Virginia Insurance Commissioner Michael Riley initially announced that the state would not "accommodate the administrative fix" because individuals and businesses had "already made extensive changes to comply with the new law," the complaint states.
As such, 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 noncompliant plans through that much longer period."
West Virginia says the fix has "reduc[ed] the political accountability of the federal government at the expense of the states."
U.S. District Judge Amit Mehta nevertheless dismissed the lawsuit for lack of standing Friday.
"Consequential harm in the form of increased or enhanced 'political accountability' is simply too abstract to support standing," Mehta wrote. "Such asserted injury presents 'abstract questions of political power, of sovereignty, of government' of the kind that federal courts are not permitted to adjudicate."
The judge questioned how the court could decide whether the administrative fix has resulted in "lines of political accountability [that] are far less certain," or has "shift[ed] political accountability away from the federal government to the states," as West Virginia claims.
"How would the court measure whether, as a consequence of the administrative fix, West Virginia's citizens, in fact, hold the state, as opposed to the federal government, responsible for the non-enforcement of the ACA's market requirements?" Mehta added, abbreviating the Affordable Care Act.
The judge later added that "the state can, at best, assert that that the administrative fix made it marginally more politically accountable to its citizens; it cannot claim that the fix made it newly accountable to them." (Emphasis in original.)
"After all, Congress gave the states a choice whether to enforce the act's market requirements," the ruling continues. "The administrative fix did nothing to alter that enforcement regime or political reality."
The West Virginia Attorney General's Office is "disappointed" by the ruling, spokesman Curtis Johnson said in an email.
"We stand by our arguments and will evaluate our next steps," Johnson added.
U.S. Department of Justice spokeswoman Nicole Navas declined to comment on the ruling.
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