Facing a Friday deadline from Democrats in Congress to "fix" Obamacare so that millions of Americans would not lose their current health care plans, President Obama announced Thursday that he was "offering an idea" that would enable more Americans to keep their plans.
Obama's "fix" allows insurance companies to continue selling the same individual health insurance plans they do now, but only to those individuals who currently own such policies, and only for another year. Under previously issued Department of Health and Human Services regulations, insurance companies were barred from selling such plans beginning January 1, 2013.
Mere minutes after Obama made his announcement, former-Democratic National Committee Chairman Howard Dean said on MSNBC, "I wonder if he has the legal authority to do this, since this was a congressional bill that set this up."
The short answer is, "no."
But before we examine why this latest Obama executive action is illegal, let's step back and look at two of his previous transgressions:
Frustrated by his failure to pass the DREAM Act in Congress, on June 15, 2012, Obama announced his Deferred Action for Childhood Arrivals (DACA) policy for illegal immigrants. Pursuant to a memo signed by then-Department of Homeland Security Secretary Janet Napolitano, Illegal immigrants who came to the United States before they were 16, were younger than 31, had been in the United States for at least 5 years, were either in school or had graduated high school, and had not committed “significant” crimes, could now be given “deferred action” status.
Illegal immigrants who are awarded "deferred action" status are allowed to obtain a work permit, get a Social Security number, and apply for a driver’s license. But Napolitano said the status is temporary and must be renewed every two years.
Nothing in any federal statute grants Obama or Napolitano the legal authority to create such a program. Instead, the Obama administration claimed that presidents have long exercised prosecutorial discretion on immigration enforcement. And it is true. There is a well established history, and case law supporting it, of presidents granting non-enforcement status to for particular groups for foreign policy or humanitarian reasons (like Haiti after a natural disaster).
But these acts of discretion were always done on an ad hoc, case-by-case basis. They were not a wholesale rewrite of immigration law, let alone one that had been recently specifically rejected by Congress.
Fast forward to July 2nd of this year, when the Treasury Department announced new regulations that delayed enforcement of Obamacare's employer mandate by a year. Nothing in Obamacare authorizes Obama to do this, in fact the statute very clearly says that the employer mandate must take effect "after Dec. 31, 2013."
So how did Obama justify changing the date with out Congressional approval? He cited a completely separate portion of the Internal Revenue Code, Section 7805(a), which the IRS has used in the past to delay enforcement of new tax laws. But, as I wrote at the time, 7805(a) had never been used on the scale that Obama used it:
IRS has previously used the section to delay a penalty under the 2007 Small Business and Work Opportunity Act and a tax hike in the 2011 Airport and Airway Extension Act.
But both of those delays were for less than a year (six months and one month, respectively), only applied to minor portions of much broader legislation, and were issued the same year the original legislation passed.
By contrast, the Obamacare employer-mandate delay was issued more than three years after the original law passed, will be in effect at least a year (possibly longer), and involves a major cost saving feature [$12 billion] of the underlying legislation.
The Latest Fix
Moving back to the if-you-like-your-plan-you-can-keep-it fix, the Obama administration is again unable to identify anything in Obamacare that gives them this authority, and they couldn't find anything in underlying HHS statutes either. Instead, they are citing a 1985 Supreme Court case, Heckler v. Chaney, which they say gives them the necessary enforcement discretion.
But Heckler v. Chaney had nothing to do with changing existing law. In that case, death row inmates sued the Food and Drug Administration in an effort to force them to apply existing regulations to the use of drugs used for lethal injection. The Court found that the FDA had discretion over how to enforce their existing regulations.
But the latest Obamacare fix is not just a decision not to enforce existing regulations, it creates brand new ones, including a requirement for what insurers must include in their policy cancellation letters.
More importantly though, if Obama can get away with citing Heckler v Chaney to rewrite Obamacare, he can cite it to rewrite any law, at any time he wants, for whatever reason.