Eugene Kontorovich comments that the President lacks such authority:

Indeed, the fix goes far beyond “non-enforcement” because it requires insurers to certain new action to enjoy the delay. This is thus not simply a delay, but a new law.

The “fix” amounts to new legislation – but enacted without Congress. The President has no constitutional authority to rewrite statutes, especially in ways that impose new obligations on people, and that is what the fix seems to entail. And of course, this is not the first such extra-statutory suspension of key ObamaCare provisions

The letter CMS sent to state insurance commissioners is here. I am not an admin law expert, but I imagine in addition to constitutional problems, there are also a host of adlaw problems. Under my understanding of the APA, the President can’t unilaterally impose new requirements on insurance companies without any notice or comment.

I imagine any insurance company would not have standing to sue.

As it stands now, they are “furious.”

Karen Ignagni, president of America’s Health Insurance Plans, who in 2008 flew to Obama’s campaign headquarters and told him the insurance industry would not support the ACA without a mandate, had this to say:

“Making sure consumers have secure, affordable coverage is health plans’ top priority.  The only reason consumers are getting notices about their current coverage changing is because the ACA requires all policies to cover a broad range of benefits that go beyond what many people choose to purchase today.

“Changing the rules after health plans have already met the requirements of the law could destabilize the market and result in higher premiums for consumers.  Premiums have already been set for next year based on an assumption of when consumers will be transitioning to the new marketplace.  If now fewer younger and healthier people choose to purchase coverage in the exchange, premiums will increase and there will be fewer choices for consumers.  Additional steps must be taken to stabilize the marketplace and mitigate the adverse impact on consumers.”

Update: My South Texas College of Law colleague Dru Stevenson, who specializes in administrative law, writes in:

I was surprised that the coterie of Admin Law profs who contribute to VC haven’t been quieting the crowd in the comments section there. The APA (Sec.553(b) explicitly exempts from notice-and-comment rules any “interpretive rule” etc:

“Except when notice or hearing is required by statute, this subsection does not apply –

(A) to interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice; or

(B) when the agency for good cause finds (and incorporates the finding and a brief statement of reasons therefore in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.”

The CMS letter easily fits within these exemptions – it is not rewriting the law or making new requirements, but it is merely saying that it will not deem certain activities to be a violation of the existing rules, and that insurance companies have more choices. Also, Kontorovich shouldn’t talk about an “Executive Order” unless there is an actual EO, which so far he has not posted or cited. The CMS letter is not, technically speaking, an Executive Order. It is an opinion letter akin to the one in the Mead case. As far as standing goes, the insurers would clearly have standing to challenge a regulation that applies directly to them and their retail activities. They may have a problem with timing of review – I don’t see any final agency action here, so judicial revie w would probably not be available yet for that reason.

553(a) also exempts from notice-and-comment rulemaking “a matter relating to . . .public property, loans, grants, benefits, or contracts.” If the vendors participating in the Exchange have some sort of contract with CMS (I presume they do), the CMS letter could also fall under the contractor exemption. When agencies act in a public procurement role, a different body of law applies than in the usual regulatory context – one in which the government has much more leeway.