The following is a guest post by Nicholas Bagley, University of Michigan Assistant Professor of Law.
A couple of weeks ago, I fielded a question about whether the Obama administration could extend the open-enrollment period for exchange plans without Congress’s help. From a quick look at the ACA, I was pretty sure the answer was “no.”
[T]he statute … requires [the Secretary of HHS] to establish [the] initial [open-enrollment] period by “not later than July 1, 2012.” Well, she’s blown through that already—and the provision appears to preclude her from rethinking the determination now. For years after 2014, the statute’s quite clear that she’s got discretion to set annual enrollment periods. But that broad discretion exists only “for calendar years after the initial enrollment period.” That reinforces the suggestion that she can’t rethink the open-enrollment period now.
I still think that’s right: at this late date, the Secretary can’t unilaterally change the open-enrollment period for 2014.
Now that I’ve taken a closer look at the ACA, however, I think there may be another way for her to skin the cat. Immediately after it authorizes the Secretary to set open-enrollment periods, the ACA empowers her to establish “special enrollment periods” that are “similar to” the special enrollment periods outlined in Medicare Part D.
What does this mean, exactly? Remember that Part D offers subsidized prescription drug plans to Medicare beneficiaries. Although beneficiaries usually have to enroll during open-enrollment periods, the Medicare statute gives the Secretary of HHS some latitude to deal with enrollment problems. Specifically, where a beneficiary can’t enroll because of “the error … or inaction” of the federal government, the Secretary can establish a “special enrollment period.” Same thing for a beneficiary who, in the Secretary’s judgment, faces an “exceptional circumstance.”
Either of these Medicare provisions could be used as a template for a special enrollment period for the exchanges. If the exchanges aren’t working, the “errors” of government officials (and boy, there were a lot of errors) would prevent people from enrolling. And it’s pretty reasonable to think that an exchange malfunction would count as an exceptional circumstance that would warrant an extension of the enrollment period.
As such, the administration would have a firm legal basis for tacking a special enrollment period onto the end of the open-enrollment period, at least for exchanges that don’t work as they should. If it comes to that, the administration could even invoke the hardship exemption to waive the penalty for people who buy insurance during that extended period.
Adding a special enrollment period would inevitably draw further attention to the botched roll-out of the exchanges. It might also upset insurers who worry that people will wait to buy insurance until they get sick. But if the exchanges still aren’t up and running in the new year, it’s mildly comforting to know that the administration could at least do something to clean up the mess it has made.
