The Obama administration is coming under fire for once again making a unilateral change to ObamaCare -- this time, quietly exempting the five U.S. territories and their more than 4 million residents from virtually all major provisions of the health care law.
The decision was made a week ago, and was a long time coming. For months, the territories have been complaining that the law was implemented so poorly in their regions that it destabilized their insurance markets.
Until now, the Department of Health and Human Services claimed its hands were tied. But last Wednesday, the department reversed course.
The about-face has some questioning the department's authority to suddenly grant 4.1 million Americans an out from ObamaCare. It follows a cascade of prior unilateral actions delaying and nixing parts of the law for certain groups -- actions which in part prompted House Republicans to launch a lawsuit against President Obama challenging his use of executive power.
"The White House knows that ObamaCare is a train wreck," Republican National Committee spokesman Raffi Williams told FoxNews.com. "Excluding the territories from their train wreck of a law is just the latest example of delays and waivers the administration has issued to quietly limit the damage of the law without admitting that they have ruined the American health care system."
The decision covers residents in Puerto Rico, Guam, the U.S. Virgin Islands, American Samoa and the Northern Mariana Islands.
Centers for Medicare & Medicaid Services Administrator Marilyn Tavenner acknowledged in her notice last week that the law was "undermining the stability" of the territories' insurance markets.
That's because the territories were subject to some parts of the law but exempt from others. Namely, their residents did not receive subsidies to help defray the cost of insurance and their residents were largely exempt from the requirement to buy insurance. But insurance companies were still supposed to follow the law's requirements to cover everyone with a certain minimum set of benefits, and other standards.
The lopsided requirements crippled the individual markets in some of the territories. In the Northern Mariana Islands, the top provider, for example, told the insurance commissioner it would stop selling new plans to residents. Premiums shot through the roof and the idea of long-term affordable health care became more myth than reality.
Last year, HHS told the territories it had no legal authority to exclude them from the provisions in ObamaCare. It furthered its case by saying the law adopted an explicit definition of "state" that includes the territories for the purpose of the mandates.
But late last week, Tavenner sent a letter to the governments of those same five territories exempting their individual health insurance markets from virtually all the major remaining provisions. She said that after a "careful review," the department determined the definition of "state" actually means "these new provisions do not apply to the territories."
"This means that the following Affordable Care Act requirements will not apply to individual or group health insurance issuers in the U.S. territories: guaranteed availability (PHS Act section 2702), community rating (PHS Act section 2701), single risk pool (Affordable Care Act section 1312(c)), rate review (PHS Act section 2794), medical loss ratio (PHS Act section 2718), and essential health benefits (PHS Act section 2707)," she wrote. According to CMS, the territories would still have to follow certain requirements for group health plans.
The legal issues for Obama's landmark legislation have been piling on in recent days.
On Tuesday, two federal appeals court rulings put the issue of ObamaCare subsidies in limbo, with one invalidating some of the subsidies and the other upholding them.
The first decision came Tuesday morning from a three-judge panel of the U.S. Court of Appeals for the District of Columbia. The panel, in a major blow to the law, ruled 2-1 that the IRS went too far in extending subsidies to those who buy insurance through the federally run exchange, known as HealthCare.gov.
A separate federal appeals court -- the Fourth Circuit Court of Appeals -- hours later issued its own ruling on a similar case that upheld the subsidies in their entirety.
The conflicting rulings could eventually put the issue before the Supreme Court.
Calls to the HHS for comment were not returned.