NAIC Logo  Last week President Obama stunned the state insurance commissioners and insurers with his announcement that he would not enforce ACA mandated requirements on private insurance policy holders and that they can keep that plans that have been or will shortly be cancelled.  The National Association of Insurance Commissioners issued a press release on November 4 fairly encapsulating the issues that will be faced by the 51 (including the District of Columbia) state insurance commissioners who will have to make decisions regarding the applicability of the President’s proposed fix to address the loss of private individual insurance policies.  NAIC President (and Louisiana State Insurance Commissioner) Jim Donelon had this to say on the matter:

“This decision continues different rules for different policies and threatens to undermine the new market, and may lead to higher premiums and market disruptions in 2014 and beyond.

In addition, it is unclear how, as a practical matter, the changes proposed today by the President can be put into effect.  In many states, cancellation notices have already gone out to policyholders and rates and plans have already been approved for 2014. Changing the rules through administrative action at this late date creates uncertainty and may not address the underlying issues.”

Another significant issue is the fact that the President’s proposal deals only with enforcement; the underlying law in the ACA remains in effect.  Might commissioners be exposing their states to legal claims if they approve the plan without statutory authority from Congress?

While blindsided by the President’s sudden announcement, some Commissioners have already reached a decision.  Here’s the score through November 15:

Approve of President’s plan:  California, Kentucky and Florida

Disapprove of President’s plan:  Washington, Arkansas

I expect in the end that most commissioners will decide against approving the President’s plan.

Whether he intended it or not, the President’s proposal effectively shifts the individual insurance cancellation issue away from Washington and thrusts it back upon the individual states and insurers.