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West Virginia Suit Says Obama Health-Law Waiver Illegal

July 30 (Bloomberg) -- West Virginia’s attorney general accused the Obama administration of illegally forcing states to regulate individual health-insurance policies, opening another angle of attack on the health-care overhaul and the president’s alleged abuse of power.

Patrick Morrisey, a Republican, claims in a lawsuit that President Barack Obama -- lacking the authority to do so -- imposed an “administrative fix” that left it up to states to determine whether individual policies needed to comply with requirements of the Patient Protection and Affordable Care Act. Under the act, the federal government was supposed to police individual plans unless a state chose to, according to the suit.

The suit echoes criticism of the president by Republicans in Congress, who contend Obama has violated laws and ignored the Constitution in wielding unauthorized presidential powers. The Republican leadership in the House has scheduled a vote as early as today on a resolution to allow a lawsuit against the administration, focusing on Obama’s delay implementing the employer insurance mandate in the health-care law.

The administration came up with the fix to allow individuals to keep their policies after the rocky rollout of the health insurance exchanges left many people unable to buy new plans that complied with the act before their old ones expired.

U.S. Powers

Shifting that responsibility to the states violates provisions of the ACA and the constitutional limitations on the powers of the U.S. government, according to the complaint filed yesterday in federal court in Washington.

The Department of Health and Human Services “left the states solely responsible -- and accountable -- for deciding whether federal law would be enforced,” Morrisey said in the complaint. The president “cannot ignore a duly enacted federal law,” Morrisey wrote.

“It strikes me as very odd that a state regulator would be objecting to being allowed to exercise discretion by the federal government,” said Tim Jost, a professor of law at Washington and Lee University. “Normally, states regulate insurance. With the administrative fix, the administration said that it believed it was reasonable to phase certain ACA rules in, but state regulators retained control over their own insurance markets.”

Insurance Signups

As of the end of June, about 8 million people signed up for private health insurance plans using the Affordable Care Act’s exchanges, including 5.4 million who used the federal healthcare.gov system. Rules released last month seek to ensure that most of those customers are able to remain covered, as is common in employer-sponsored health plans.

Bill Hall, a spokesman for Health and Human Services, didn’t respond to a phone call seeking comment on the complaint.

Insurers and consumer advocates have been concerned the new rules may make renewals too complicated or force millions of people back to government websites. Under the proposal, 95 percent of customers who purchased plans through the federal website will be automatically renewed, unless they seek changes in their policy or their subsidies, according to the Department of Health and Human Services.

The initial administrative fix was announced in November. In March, the federal government again changed its regulation of Obamacare to give consumers and states more flexibility to decide on their health plans, insurers more time to sign up customers and taxpayers a chance to avoid more costs.

Under the change, Americans with health coverage that pre-dates Obamacare could stay on their plans for two more years, officials said.

Morrisey is asking the court to rule the administrative fix unlawful and to require the Department of Health and Human Services to work with Congress to address the millions of plans that Obamacare made illegal, according to the suit.

The case is West Virginia v. Department of Health and Human Services, 14-1287, U.S. District Court, District of Columbia (Washington).

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net;

To contact the editors responsible for this story: David E. Rovella at drovella@bloomberg.net Fred Strasser, Peter Blumberg

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