Not only does President Obama lack the legal authority to impose the "fix" for insurance cancellations he described on Thursday, but his entire proposal boils down to inviting insurance companies to violate federal law, and promising not to prosecute them for it.
That's not an oversimplification - it's literally true. The Affordable Care Act - which Obama has previously been fond of describing as "the settled law of the land," evidently confident that his dimmer constituents will believe settled laws have never been changed or repealed before - includes legal requirements for the content of insurance policies. Obama's "fix" invites insurance companies to violate those laws for a year, while he instructs the relevant regulatory agencies to look the other way.
This isn't the rule of law. It's Chicago corruption - no different, at heart, from the inspector who takes a cash payoff to look the other way while seedy nightclubs violate city ordinances. It's one of the most shameful utterances a high government official has ever made, to say nothing of being rather had to square with those photos of Obama's signature on the ACA, with the caption "IT'S. THE. LAW." that his political operation likes to spread across social media. The key element of ObamaCare defense, throughout the last-ditch Republican effort to defund or delay the law before it failed in precisely the ways they predicted, was the belligerent shriek that no one can dare oppose this almighty law, which is more powerful and permanent than the very Constitution itself. But at the same time, they're telling us the whole thing is written in pencil, and Barack Obama can erase anything he finds politically inconvenient.
No one really takes Obama's "fix" seriously - even left-wingers know he's just making a political move, trying to shift blame onto the insurance companies and reassure terrified Democrats that he's got a strategy for keeping them alive through the 2014 elections. The odd liberal who feels a duty to justify this ridiculous nonsense claims it's an exercise of "discretionary authority," which they misconstrue as meaning the government always has limitless power to simply ignore any law it doesn't feel like enforcing. That's not true at all, not even by the most tortured legal interpretation. Discretion involves individual cases, not blanket invitations for everyone to have fun violating the law while Lady Justice is locked in a closet for next year. Any insurance company foolish enough to accept Obama's corrupt offer will find that out the hard way, when someone inevitably sues the living hell out of them for violating the Affordable Care Act. There would be trial lawyers chomping at the bit to recruit plaintiffs for those cash-bonanza lawsuits.
Jonathan Adler sums it up at the Volokh Conspiracy:
Does this make the renewal of non-compliant policies legal? No. The legal requirement remains on the books so the relevant health insurance plans remain illegal under federal law. The President’s decision does not change relevant state laws either. So insurers will still need to obtain approval from state insurance commissioners. This typically requires submitting rates and plan specifications for approval. This can take some time, and is disruptive because most insurance companies have already set their offerings for the next year. It’s no wonder that some insurance commissioners have already indicated they have no plans to approve non-compliant plans.
Yet even if state commissioners approve the plans, they will still be illegal under federal law. Given this fact, why would any insurance company agree to renew such a plan? It’s nice that regulators may forbear enforcing the relevant regulatory requirements, but this is not the only source of potential legal jeopardy. So, for instance, what happens when there’s a legal dispute under one of these policies? Say, for instance, an insurance company denies payment for something that is not covered under the policy but that would have been covered under the PPACA and the insured sues? Would an insurance company really want to have to defend this decision in court? After all, this would place the insurance company in the position of seeking judicial enforcement of an illegal insurance policy.
The highest level of political power is reached when the Ruling Class can selectively ignore the laws it imposes. It's bad enough to trap the populace in a maze of regulations, but even worse when they can look up and see a favored few strolling by overhead. Tyranny is not truly achieved until the law can be waived and rewritten; the aspiring tyrant has little interest in subjecting himself, his family, his friends, and his valuable political allies to the full force of his decrees. ObamaCare would be repealed tomorrow, in an emergency session of Congress, if there were no exceptions to it, and Obama probably wouldn't try to veto the repeal bill.
It's interesting how much Big Government relies on the kind of "discretion" included in Barack Obama's corrupt offer to insurance companies. The whole racket would swiftly come crashing down if there was true equality under the law. The system is entirely dependent on its ability to punish people who have committed no crime. Equality under the law would put a swift halt to everything from wealth redistribution to Solyndra-style economic policies.
Tyranny is whimsical, because it has to be. The ability to arbitrarily reward and punish select groups is crucial to the Ruling Class grip on power. The shocked and frightened people losing their insurance policies to ObamaCare didn't do anything wrong. They believed Obama's often-repeated promises that participation in his health-care scheme would be voluntary - they could keep their existing plans if they preferred. They would never have agreed to the plan if they knew the truth, so they were lied to, by a political Party that believes it has the right and duty to tell that kind of lie, because the ignorant masses must be forced to do certain things for the greater good.
Now the victims of ObamaCare are told to feel better because the whimsy of a tyrant has granted them one more year to enjoy their precious insurance plans... and if those plans are not restored, well, hey, it's the fault of the evil insurance executives! Obama told them they could violate the law for a year, and he promised to hold the titanic regulatory powers of the IRS, Department of Health and Human Services, and other agencies at bay. If the companies don't slip you that sweet, affordable, superior pre-ObamaCare coverage under the table, you should direct your hatred at them.
Of course, both insurance providers and their customers might wonder if the tyrant's whimsy could change again, and maybe he'll suddenly decide to change the rules again, snapping his fingers to release the regulatory hounds he promised to keep on short leashes, because his political fortunes have shifted again. But that's the problem with relying upon the favor of a benevolent dictator, rather than insisting on the proper legislative procedures laid out in the Constitution. That's the problem with a diminished, timid, subservient nation that is willing to look upon the freedom to buy an insurance policy of your choice as a temporary "gift" from an all-powerful leader.
In this lawless era, the government is not concerned with protecting anyone's inalienable rights. In free-market private commerce, we have an individual right to terminate relationships and take our business elsewhere. Under Obama-style dictatorial control, we have a theoretical collective ability to get the dictatorship's attention once every couple of years, and if we organize effectively enough - if the ranks of unhappy voters grow large enough to threaten the legion of loyal machine-processed Ruling Class defenders - we might just be able to get our masters to throw us a bone.