Political Accountability and the Obamacare Administrative Fix

August 12th, 2014

I previously blogged about West Virginia’s challenge to the Obamacare Administrative Fix. In short, it allowed insurers to continue offering grandfathered plans (which were void under federal law), allowed state insurance commissioners to authorize these void plans, and (contrary to the statute) HHS would not serve as a backstop and enforce the law for the states (cooperative federalism, or something like that).

Nick Bagley observes that WV faced the “same choice before and after the fix.”

For all practical purposes, West Virginia faced the same choice before and after the administrative fix: whether to use state resources to enforce the ACA. And it was a bona fide choice: prior to the fix, insurance commissioners in six states had announced they wouldn’t enforce the statute. All the administrative fix did was change the political stakes of a non-enforcement decision.

I think the choice is somewhat different before and after the fix.

Before the fix, my home state of Texas (and 5 others) announced they would not enforce the regulations, but HHS would, and ensure that Texans would receive the benefits of the ACA. Thus, Texas was free to decline to enforce the law with impunity, because there would be no appreciable difference in the benefits received by Texas.
But after the fix, things are different. If WV announces it won’t enforce the regulations, now HHS won’t do it either, and West Virginians will get the shaft. Now, WV is not free with impunity to decline to enforce the law. There would be a significant difference in the benefits received by Mountaineers. So there was a change in political accountability.

As one other level of Obamcare irony, the administrative fix operates much like how the tax credits work, as articulated by the Halbig challengers–states that do not play ball will be punished, and their citizens will get the shaft.