Oregon Insurance Commissioner violated the law

Dennis Richardson 2013_thb

Oregon Legislative Counsel: Oregon Insurance Commissioner’s decision to circumvent new health care reform law “exceeded her legal authority”

Rep. Dennis Richardson

On November 15, Governor John Kitzhaber, through his Insurance Commissioner Laura Cali, announced that Oregon health insurance companies would be allowed to extend current policies through December 31, 2014 (Click here). In doing so, the Governor and Insurance Commissioner violated Oregon law and the Oregon Constitution.  Even if his intentions are good, as chief executive the Governor only has the authority to execute the laws passed by the Legislature, not to supersede them.

The Affordable Care Act (ACA) requires health insurance policies to include certain provisions in all individual and small group health plans renewed after January 1, 2014.  The 2013 Oregon Legislature incorporated the provisions of the ACA into Oregon law by passing House Bill 2240 (2013) which amended, among other sections of state law, Oregon Revised Statutes Chapter 743.

Unfortunately, the world was watching as the rollout of the Oregon health insurance exchange (Cover Oregon) was a dismal failure and a widely publicized embarrassment.

In order to lessen the disastrous consequences of having 140,000 Oregonians receive health insurance cancelation notices resulting from the ACA and Oregon’s health care legislation, Governor Kitzhaber, through his Insurance Commissioner Laura Cali, unilaterally decreed that they would circumvent the new law adopted by the Legislature this year.

Even though I was only a small town attorney, it appeared obvious to me that once the Oregon Legislature passed a statute, only the Legislature would have the authority to change the law. Nevertheless, I requested a legal opinion from the Legislature’s attorneys to answer the following question:

“Did the (Insurance) Commissioner exceed her legal authority by enabling Oregon insurance companies to sell health insurance to Oregonians in 2014 in violation of the minimum standards required under the ACA and Oregon law?”

In response to my request for legal research and an opinion on this issue, the Legislative Counsel (LC) prepared for me an LC Opinion letter that includes in part the following:

“The commissioner’s announcement that she will allow all health benefit plans that were in effect on October 1, 2013, to continue through the end of 2014 allows noncompliant plans to continue for up to 12 months longer than the ACA allows. Therefore, we believe the commissioner exceeded her legal authority.”

If the Oregon Constitution and the rule of law mean anything in Oregon, Governor Kitzhaber should explain where he obtained the authority to have the Insurance Commissioner contradict Oregon law in an attempt to make up for the failure of his health insurance exchange.  If the failure of Cover Oregon’s website required a change in Oregon law to protect against the loss of health care to thousands of Oregonians, that change could only be constitutionally granted by the Legislature.  To enable the desired legislative action, the Governor could have declared an emergency and called a Special Session of the Legislature as he has done so many times in the past.

In short, with good intentions, the Governor and his Insurance Commissioner have assumed authority they did not have.  I am reminded of Daniel Webster, who more than 150 years ago described such well-intended assumptions of unauthorized power, when he stated:

“Good intentions will always be pleaded for every assumption of authority.  It is hardly too strong to say that the Constitution was made to guard the people against the dangers of good intentions. There are men in all ages who mean to govern well, but they mean to govern.  They promise to be good masters, but then mean to be masters.”