Insurers May Be Sued If They Accept Obamacare ‘Fix’

Protection: Insurance for insurance.
National Journal
Sam Baker
Nov. 21, 2013, 11:47 a.m.

If you like your health care plan, you can keep it — and sue the in­sur­ance com­pany for selling it to you. At least, that’s what some law­yers say.

In its at­tempt to let people keep their can­celed health care policies, the White House has said some plans don’t have to com­ply with cer­tain Obama­care re­quire­ments for an­oth­er year. But those re­quire­ments are still on the books, even if the White House isn’t en­for­cing them.

Cus­tom­ers who buy un­canceled plans can still sue in­sur­ance com­pan­ies for not meet­ing the law’s stand­ards, leg­al ex­perts say.

“If I was an in­sur­ance com­pany, I’d be very wor­ried about this,” said Jonath­an Adler, a law pro­fess­or at Case West­ern Re­serve Uni­versity, adding, “The law is still the law.”

Some states and in­sur­ance car­ri­ers are already skep­tic­al of Obama’s pro­pos­al and un­enthu­si­ast­ic about go­ing through the com­plic­ated pro­cess of un­canceling plans for just a year. The threat of law­suits could be an­oth­er reas­on for in­surers to re­ject the White House’s pro­pos­al.

Here’s how it works: The health care law sets cer­tain stand­ards for all in­di­vidu­al in­sur­ance plans. They have to cov­er a set of 10 “es­sen­tial be­ne­fits,” for ex­ample, and can’t im­pose life­time caps on cov­er­age. In­sur­ance com­pan­ies have been can­celing policies that don’t meet those stand­ards and don’t qual­i­fy for the re­l­at­ively nar­row “grand­fath­er­ing” ex­emp­tion writ­ten in­to the law.

The can­cel­la­tions caused such a polit­ic­al firestorm that the ad­min­is­tra­tion al­lowed in­sur­ance com­pan­ies to un­cancel their plans and sell them for an­oth­er year. In­surers can keep selling policies that don’t com­ply with all of the health care law, and the ad­min­is­tra­tion prom­ised to look the oth­er way.

But the stand­ards plans have to meet are writ­ten in­to the law. So, the ad­min­is­tra­tion might not do any­thing about plans that don’t meet the law’s re­quire­ments, but a con­sumer could still sue his or her in­sur­ance com­pany for selling a product that doesn’t cov­er ser­vices it is leg­ally re­quired to cov­er.

“The fact that the law still says what it says has im­plic­a­tions bey­ond the fed­er­al gov­ern­ment’s will­ing­ness to en­force it,” Adler said.

Adler is a crit­ic of the Af­ford­able Care Act, but more-sym­path­et­ic leg­al ex­perts share his view on po­ten­tial law­suits. Nich­olas Bagley, a law pro­fess­or at the Uni­versity of Michigan, said in­surers do ap­pear, at first glance, to be at risk for lit­ig­a­tion.

“I know enough to be able to say with some con­fid­ence that the in­surers have reas­on to be wor­ried,” Bagley said.

This dy­nam­ic could change as the ad­min­is­tra­tion fleshes out its pro­pos­al. But its ini­tial rol­lout didn’t do any­thing to shield in­sur­ance com­pan­ies, Adler said.

“An in­surer who con­tin­ues to provide a policy that does not com­ply with the ACA’s re­quire­ments, and denies pay­ment for an ACA-covered pro­ced­ure in keep­ing with the policy, could be sued by the en­rollee,” said Chris Holt and Laura Collins, policy ana­lysts at the con­ser­vat­ive Amer­ic­an Ac­tion For­um.

In press ac­counts and in a brief let­ter to state in­sur­ance reg­u­lat­ors, the ad­min­is­tra­tion simply said it doesn’t plan to en­force the health care law’s re­quire­ments for cer­tain policies. It didn’t try to make the case that the law it­self calls for a gradu­al trans­ition to the new re­quire­ments.

That ap­proach might at least give the ad­min­is­tra­tion’s de­cision more weight if any­one does sue their in­surer.

“I’m not sure that that would work,” Adler said, “but that would raise dif­fer­ent ques­tions, and there would be a stronger ar­gu­ment there.”

What We're Following See More »
FRENCH IS A LAWYER, VETERAN
Kristol Recruiting National Review’s David French for Third-Party Run
8 hours ago
THE LATEST

"Two Republicans intimately familiar with Bill Kristol’s efforts to recruit an independent presidential candidate to challenge Donald Trump and Hillary Clinton have told Bloomberg Politics that the person Kristol has in mind is David French -- whose name the editor of the Weekly Standard floated in the current issue of the magazine.

French is a veteran of Operation Iraqi Freedom. According to the website of National Review, where French is a staff writer, he is a constitutional lawyer, a recipient of the Bronze Star, and an author of several books who lives in Columbia, Tenn., with his wife Nancy and three children."

Source:
CALIFORNIA VOTES IN A WEEK
Jerry Brown Backs Clinton
10 hours ago
THE LATEST

California Gov. Jerry Brown endorsed Hillary Clinton today, calling her "the only path forward to win the presidency and stop the dangerous candidacy of Donald Trump." While praising Sen. Bernie Sanders' campaign, Brown said "Clinton’s lead is insurmountable and Democrats have shown – by millions of votes – that they want her as their nominee. ... This is no time for Democrats to keep fighting each other. The general election has already begun."

Source:
GLASS CEILING STILL HARD TO CRACK
Clinton Says Voters Still Hung Up on Gender
13 hours ago
THE LATEST

In a New York Magazine profile, Hillary Clinton said she still encounters misogyny at her own events: “‘I really admire you, I really like you, I just don’t know if I can vote for a woman to be president.’ I mean, they come to my events and then they say that to me.”

Source:
CHANGE WE CAN’T BELIEVE IN
Trump Vows Not to Change
13 hours ago
THE LATEST
Source:
BACKING OUT ON BERNIE
Trump Won’t Debate Sanders After All
4 days ago
THE LATEST

Trump, in a statement: “Based on the fact that the Democratic nominating process is totally rigged and Crooked Hillary Clinton and Deborah Wasserman Schultz will not allow Bernie Sanders to win, and now that I am the presumptive Republican nominee, it seems inappropriate that I would debate the second place finisher. ... I will wait to debate the first place finisher in the Democratic Party, probably Crooked Hillary Clinton, or whoever it may be.”

×