WSJ: Exempting US Territories From Obamacare Is Illegal

Monday, 21 Jul 2014 01:38 PM

By Melanie Batley

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The Obama administration had no legal basis for its quiet announcement last week that the residents from all five U.S. territories are not required to sign up for Obamacare, according to an editorial in The Wall Street Journal.

Though Congress initially allocated funds for insurance exchanges in the territories, the $14.5 billion in subsidies were abandoned in 2010 as part of the Democrats' need to push down the projected pricetag.

As a stopgap, the administration opened several public health programs in the territories and made Obamacare's new regulatory standards a requirement for insurance companies providing consumer coverage.

The move caused insurance companies to hike their rates, and many insurers left the territorial markets altogether. In the Mariana Islands, for example, it is not possible to buy any type of health insurance policy, according to the Journal.

As a result, the territories have spent the last two years lobbying the administration for an exemption from the regulatory mandates. The Health and Human Services Department insisted as recently as last year that the territories were "benefiting" from the consumer protections and that the department "has no legal authority to exclude the territories" from Obamacare.

But last week, the administration made an about-face, and said that after "a careful review of this situation and the relevant statutory language" the territories would not be subject to the Obamacare mandates.

The decision was based on a reinterpretation of the definition of "state" and how it applied in this case to the territories, the Journal wrote, arguing that the administration had no legal basis for the decision.

"The White House seems to have an elastic definition of states," the Journal said. "But most elastic is its definition of statutes, which apparently mean whatever Mr. Obama says they mean at any given moment.

"His new dispensation is great for the territories, but awful for the Constitution and rule of law."


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