Is the President’s Obamacare Tweak Legal?

Writing at the Volokh Conspiracy, Case Western
Reserve Law Professor Jonathan Adler is
skeptical:

According to the President’s announcement, insurance companies
will be allowed to renew policies that were in force as of October
1, 2013 for one additional year, even if they fail to meet relevant
PPACA requirements. What is the legal basis for this change? The
Administration has not cited any. (See, e.g., this
letter to state insurance commissioners explaining the
change.) According to various press
reports, the Administration argues it may
do this as a matter of enforcement discretion (much as it
did with immigration). In other words, the Administration is not
changing the law. It’s just announcing it will not enforce federal
law (while simultaneouslythreatening
to veto legislation that would authorize the step the
President has decided to take).

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. 

We’ve already seen resistance from state insurance
commissioners, who have argued that the president’s proposed tweak

simply isn’t feasible. And the health insurance industry
doesn’t seem particularly thrilled with the plan either. Insurers
have a meeting at the White House today, so we’ll presumably have a
better idea of where health plans stand by the end of the
day.