It depends on what the definition of state is. Last year, the Obama administration informed U.S. territories they had the same obligations under Obamacare as any state.
But this week, Marilyn Tavenner, administrator for the Center for Medicare and Medicaid Services, sent a letter to territory governments issuing a waiver on most Obamacare mandates for Puerto Rico, the U.S. Virgin Islands, American Samoa, Guam and the Northern Mariana Islands.
“Currently, the department uses existing Public Health Service Act (PHS Act) definition of ‘state’ for new PHS Act requirements and funding opportunities included in title I of the Affordable Care Act,” said a letter from Tavenner. “Under this definition, the new market reforms in the PHS Act apply to territories. We have been informed by representatives pf the territories that this interpretation is undermining the stability of the territories’ health insurance markets.”
The agency decided to simply interpret the law differently.
“After careful review of this situation and the relevant statutory language, HHS has determined that the new provisions of the PHS Act enacted in title I are appropriately governmental by the definition of ‘state’ set forth in that title, and therefore that these new provisions do not apply to the territories,” Tavenner’s letter continued.
The territories do not have to comply with the Affordable Care Act’s requirements for guaranteed availability of insurance, community ratings of insurance plan, a single risk pool, rate reviews, medical loss ratio and essential health benefits.
Previously, the territories had to comply with all of these mandates on the insurance providers, and the territory governments have warned the Obama administration for year this could destroy their insurance markets, the Washington Post reported.
Last year, the response to the territories was essentially, sorry, tough luck.
“However meritorious your request might be, HHS is not authorized to choose which provisions … might apply to the territories,” Gary Cohen, director of the CMS Center for Consumer Information and Insurance Oversight said in a July 12, 2013 letter.
(H/T The Washington Post)