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....