Court Strikes Down Obama Health Care Rule on Insurance Standards

The New York Times reports:

A federal appeals court has ruled that consumers must be allowed to buy certain types of health insurance that do not meet the stringent standards of the Affordable Care Act, deciding that the administration had gone beyond the terms of federal law.

The court struck down a rule issued by the Obama administration that barred the sale of such insurance as a separate stand-alone product.

“Disagreeing with Congress’s expressly codified policy choices isn’t a luxury administrative agencies enjoy,” the United States Court of Appeals for the District of Columbia Circuit said on Friday in a decision that criticized “administrative overreach” by the Department of Health and Human Services.

At issue is a type of insurance that pays consumers a fixed dollar amount, such as $500 a day for hospital care or $50 for a doctor’s visit, regardless of how much is actually owed to the provider.

Such “fixed indemnity” insurance is normally less comprehensive and less expensive than the “minimum essential coverage” required by the Affordable Care Act. Under the rule, issued by the Obama administration in 2014, fixed indemnity policies could be sold only to people who already have the more comprehensive coverage that meets detailed federal standards.

State officials and insurers estimate that as many as four million people might have fixed indemnity policies without major medical coverage.

The Obama administration gave several reasons for cracking down on fixed indemnity insurance. It is “an inadequate substitute for major medical coverage” because “it does not provide protection against major medical expenses,” the administration said. Moreover, it said, consumers may be confused and may buy fixed indemnity insurance in “the mistaken belief that it provides comprehensive coverage” — a concern also voiced by consumer groups.

As you can see: the Obama regime isn't a fan of the contracts clause of the U.S. Constitution.