The White House keeps changing Obamacare. Is that legal?

August 7, 2013

Welcome to Health Reform Watch, Sarah Kliff’s regular look at how the Affordable Care Act is changing the American health-care system — and being changed by it. You can reach Sarah with questions, comments and suggestions here. Check back every Monday, Wednesday and Friday afternoon for the latest edition, and read previous columns here.

Health and Human Services Secretary Kathleen Sebelius and President Obama (Mark Wilson/Getty Images)

When The New York Times asked President Obama about the legal objections raised to the employer mandate delay, he answered with the following.

“I’m not concerned about their opinions,” Obama said of legislators who raised concerns. “Very few of them, by the way, are lawyers, much less constitutional lawyers.”

The Obama administration has made numerous adjustments and tweaks to the Affordable Care Act as the law has come into effect. Two recent decisions – one to delay enforcement of the employer mandate until 2015, and another to allow Congress to continue paying for health benefits – have raised questions about how far that discretion should go, whether the White House has overstepped its executive authority.

“This is one of the perennial questions in administrative law: How much power can you claim from statutory ambiguity?” says Nicholas Bagley, who teaches administrative law at the University of Michigan Law School. “The hard question for those of us trying to ascertain the bounds is how flexible are laws, and how much power do we believe Congress gives to the executive branch?”

The White House can’t simply decide not to set up a law; that much is clear in the constitution, which says the executive branch “shall take care that the laws be faithfully executed.”

At the same time, Congress has also given the executive branch some flexibility in determining what it means to “faithfully” execute a law. It’s hard, after all, for legislators to predict every thorny issue that will come up in the process of turning laws into regulations.

In 1946, legislators passed the Administrative Procedures Act, which governs the way that regulatory agencies carry out legislation. That law both gives agencies discretion in setting up laws, but holds them accountable for carrying out Congress’s intentions.

“Under the Administrative Procedure Act precedent, the courts can compel agencies that have been unreasonably delayed,” says Simon Lazarus, a senior counsel at the Constitutional Accountability Center. “Those tend to involve delays that have gone on for years.”

Courts have frequently grappled with issues of what counts as an “unreasonable” delay and, as many experts will tell you, they still haven’t set a bright line between executive discretion and disobedience.

Still, there is precedent that gives us some guidance into what is, and is not, appropriate.

In Chevron v. NRDC, a 1984 Supreme Court case, the justices granted regulatory authority when it comes to filling in any ambiguous gaps in a law. “The idea there was that the agency has the experts, and it also makes the executive branch electorally accountable,” Bagley says. “You’d want the President to be making the tough calls.”

Another case decided in the District of Columbia circuit court that same year provided additional guidance on what standards the courts should look to, in determining whether a delay was unreasonable. In that case, Telecommunications Research and Action Center v. FCC, the judges outlined a six-pronged test to understand delays that extended beyond statutory deadlines.

It stated that “delays that might be reasonable in the sphere of economic regulation are less tolerable when human health and welfare are at stake” and said the court should also take into account “where Congress has provided a timetable or other indication of the speed with which it expects the agency to proceed in enabling statute.”

So, where does that leave us with the Affordable Care Act? Michael McConnell, a former judge on the U.S. Court of Appeals for the Tenth Circuit, has made perhaps the highest-profile argument that the decision was illegal. His case is that the employer mandate delay does more than show flexibility – it dispenses with law altogether.

“Statute does provide broad discretion, but unless there’s some explicit statutory authorization they don’t have the right not to do it,” McConnell, who now directs the Constitutional Law Center at Stanford University's School of Law, says. “That’s the difference. Suspending and dispensing with statutes are equally impermissible.”

McConnell says this isn’t an issue specific to the Obama administration, or the Affordable Care Act. President Richard Nixon asserted authority not to spend the money appropriated by Congress, which then led legislators to pass the Congressional Budget and Impoundment Control Act in 1974. The legislation, which prohibited such behavior, was later upheld in the courts.

In Congressional testimony, Treasury makes a counter argument: That the agency is by no means dispensing with the law -- they still plan to implement it -- but rather making an adjustment, well within executive discretion. The agency says this authority stems from its power to “prescribe all needful rules and regulations for the enforcement of this title.”

Moreover, this is something that the agency has done more than a dozen times before, without a peep from Congress.

“On a number of prior occasions across administrations, this authority has been used to postpone the application of new legislation when the immediate application would have subjected taxpayers to unreasonable administrative burdens or costs,” Mark Iwry, Deputy Assistant Secretary for Retirement and Health Policy at Treasury, told legislators.

Precedent does matter in courts, University of Michigan’s Bagley says. At the same time, he doesn’t see this as an especially strong legal foundation for defending the delay.

“There are challenges in the argument,” he says. “Affording transitional relief for a law that was enacted four years ago raised the question of, shouldn’t you have had your ducks in a row when you knew this was coming down the pike? There might be questions about whether a year is an appropriate delay, too.”

Its also possible, legal experts say, that it's too soon to determine whether this delay counts as not implementing the Affordable Care Act – or if it's a more mundane show of discretion. If the administration had, for example, announced that it never intended to require employers to provide health benefits, that would near certainly be seen as flouting the law. But if they delay it until 2016, or 2017? That’s a greyer area.

“It depends on whether there’s really clear progress towards the implementation of the statute,” says Rob Weiner, a former associate deputy attorney at the Department of Justice, whose work focused heavily on Affordable Care Act litigation. “If they were doing nothing, at some point, I think that a court would suggest it's not an exercise of discretion and say enough is enough.”

KLIFF NOTES: Top health policy reads from around the Web.

Texas won't enforce Obamacare's insurance reforms. "Texas, Arizona, Alabama, Missouri, Oklahoma and Wyoming have all notified the federal government that they will not be policing the health law. John Greeley, a spokesman for the Texas Department of Insurance, said his agency cannot enforce regulations tied to the federal insurance exchange or market reforms because it is not authorized to do so. The practical effects of the state's decision are not entirely clear yet. In the first show of autonomy, Texas was not required to comply with a federal request for information about its insurance plans. Most states defaulting to the federal health insurance exchange had to submit that information by July 31." Becca Aaronson in the Texas Tribune

George W. Bush's heart stent has kicked off a debate over appropriate care. "The debate has centered on both the cost of stenting, which can run as high as $50,000 at some hospitals, and its side effects, which can include excess bleeding, blood clots and, rarely, death. Opponents say the overuse of procedures like stenting for unproven benefit has helped keep U.S. medical care on pace to surpass $3.1 trillion next year, according to the U.S. Centers for Medicare and Medicaid Services." Michelle Fay Cortez in Bloomberg News.

Not all Congressional staffers will buy coverage on the new marketplaces. "The proposal leaves it to 'the employing office of the member of Congress' to determine whether an employee meets the statutory definition in the health care law (PL 111-148PL 111-152) of who is required to go to the exchange for health insurance, the personnel agency said. The law says that aides who must use the exchanges include those who work for “the official office of a member of Congress.” Enrollment in the exchanges, or marketplaces, begins Oct. 1." John Reichard in Congressional Quarterly.

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