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Lawyer: State overstepped by extending policies

Jonathan j. Cooper, Associated Press

PORTLAND, Ore. (AP) -- A lawyer for the Oregon Legislature says the state insurance commissioner overstepped her authority when she allowed insurance companies to extend policies that had been canceled because they don't meet standards under the federal health care law.

The legislative counsel's office issued the opinion Tuesday in response to a question from state Rep. Dennis Richardson of Central Point, a Republican running for governor. Senior Deputy Legislative Counsel Lorey Freeman wrote that health plans can be in effect for only 12 months and the insurance commissioner can't extend that time.

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.

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.

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

Richardson blasted the legal analysis to his extensive email list, saying Gov. John Kitzhaber should have called a special session rather than allowing the insurance commissioner to act on her own.

"In short, with good intentions, the governor and his insurance commissioner have assumed authority they did not have," Richardson wrote.

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."