Legislature's lawyers believe insurance extension violates state law

Legislature's lawyers believe insurance extension violates state law »Play Video
FILE PHOTO- State Rep. Dennis Richardson, R-Central Point, says Gov. John Kitzhaber and the state's insurance commissioner, Laura Cali, do not have the authority to allow insurance companies to extend canceled health insurance plans.

SALEM, Ore. -- State Rep. Dennis Richardson, R-Central Point, believes Gov. John Kitzhaber and Oregon Insurance Commissioner Laura Cali went beyond their legal authority in allowing insurance companies to extend the canceled plans that did not meet the minimum standards set by the Affordable Care Act.

Cali's decision allowed insurers to offer the plans until the end of 2014, but the Legislature's counsel claims that decision is beyond her authority.

"The insurance commissioner and the governor do not have the power to circumvent and supersede statutes that are Oregon law," Richardson told On Your Side Investigator Chelsea Kopta on Friday.

Richardson, a long-time attorney, continued, "It was obvious to me that there'd been a breach of power when the executive branch decided to change contract law and circumvent Obamacare - the Affordable Care Act - just because they think that's a good thing to."

And the Oregon Legislature's legal counsel backs him up.

The counsel said that under state law, health coverage that begins before Jan. 1, 2014 is not subject to the Affordable Care Act's conditions. But in its opinion, the committee believes Cali has extended insurance policies that don't line up with the ACA for 12 months beyond the normal coverage year.

The Oregon Insurance Division disagrees. A spokeswoman, Cheryl Martinis, said the agency determined plans that don't meet the standards can be renewed for another full year if that's done before the standards are effective, Jan. 1.

Oregon's Deputy Insurance Administrator, Berri Leslie, told KATU, "We feel real confident that both, under state law and federal law, the 2014 insurance reforms apply to the plans that start in January of 2014. So plans issued in 2013, or I should say, renewed in 2013 are not subject to those rules."

The opinion isn't binding, and the agency isn't changing its policy. It's not unusual for lawyers for the legislative and executive branches to reach different conclusions about complex legal questions. A judge would be responsible for determining the legality of the commissioner's actions if someone were to sue.

"We made the decision to allow insurers to extend plans so that in this period of transition, Oregonians have more time and options available to them in making the health insurance decisions that best meet their needs," Martinis said.

People covered by 145,000 individual policies and 193,000 small group plans had faced cancellation, despite assurances from President Barack Obama that people who liked their insurance plans would be able to keep them under his health care law. Under fire, the president asked insurance companies and state regulators to allow policies to continue.

Cali said she would do so. Nine insurance companies are allowing people in Oregon to extend their policies. Seven companies are allowing extensions through the end of 2014, while two are allowing extensions only through March 31.

"I'm not necessarily saying the decision is bad, I'm saying how it was implemented is a violation of our Republican form of government," Richardson said. "It violates the separation of powers."

Richardson believes that Kitzhaber would have to call a special session for lawmakers to change the rules. He claims the commissioner's decision is driven by the failure of Cover Oregon's website.

Kitzhaber told The Oregonian that the legislative counsel analysis is flawed and he's having the Department of Justice review the decision again.

"We did real due diligence on this," Kitzhaber said. "We believe we're on very solid ground on that."

Richardson is also running for the Republican nomination in next year's race for governor. Kitzhaber, a Democrat, has not said whether he'll run for another term.

KATU's On Your Side Investigator Chelsea Kopta contributed to this report.