Last Thursday, the President announced a change in Administration policy designed to ensure that those who like their health insurance plans will be able to keep them for at least one more year, despite the legal requirements of the PPACA and its implementing regulations. On Friday, I explained the President lacks the authority to waive the Act’s requirements, or even to set aside duly promulgated regulations, and could not make noncompliant health insurance plans legal under the PPACA. All the President can do is to declare that the federal government will not enforce the PPACA’s requirements against insurers for renewing noncompliant plans. The President’s announcement does not bind state insurance commissioners, however, nor does it overcome the legal jeopardy health insurers could face should they agree to renew such plans and enforce any terms that have been declared illegal under the PPACA.
The University of Michigan’s Nicholas Bagley is certainly more sympathetic to the PPACA than am I, but he is no more convinced of the legality of the President’s purported “fix.” In a post on The Incidental Economist, he explains why he doubts whether the President’s assertion of enforcement discretion “works.”
The administration’s claim rests on an expansive reading of Heckler v. Chaney, an important Supreme Court decision from 1985. In Heckler, the Court held that agencies have wide discretion to decide whether, when, and how to enforce the law. No agency, the Court explained, has enough resources to police every technical legal violation. Instead, agencies must set priorities based on a host of factors—the harm caused by the violation, the likelihood of prevailing, the need to conserve scarce resources, and the like. Courts shouldn’t second-guess how an agency weighs all those factors. Enforcement, in the legal jargon, is “committed to agency discretion by law.”