O’Neill Institute for National and Global Health Law O’Neill Institute for National and Global Health Law Legal Issues in Health Reform

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Civil War Redux

As Tim Jost well explains, the principle of Federal Supremacy is so well settled that the threat by some state governors or legislators to bar their citizens from complying with federal health care reform is overt legal defiance, or a form of civil disobedience if you will.

Civil disobedience might be justified in some circumstances, but surely not this one. If state law makers feel that federal law violates constitutionally-protected states’ rights, they can simply assert that claim in a judicial challenge to the law. As Tim explains, nothing in draft legislation so directly impacts state sovereign interests as to justify in any way an absolute refusal to permit federal reform, pending any legal challenge. Congress has a long history of deferring to state prerogatives in health care regulation, as witnessed by HIPAA insurance reforms and Medicaid waivers, and Congress appears to be following the same course of action here.

If anything, talk of state nullification could backfire, convincing Congress that some states cannot be counted on to implement reform measures in good faith. Some states refused to take Recovery Act funds, and some have defied the federal ban on medicinal uses of marijuana, so state “nullification” is not unheard of in modern times. For health insurance reform to succeed, near-universal compliance is required in order to create market conditions that allow us to ban medical underwriting. If particular states want to preserve insurers’ ability to pick and choose their subscribers according to health status, then federal legislation should have strong default provisions that override state insurance regulations that fail to meet fundamental national objectives.

One Comment

  1. James Horan
    Posted October 25, 2009 at 3:31 PM | Permalink

    It should be noted that Congress has determined that it has no legal authority to impose Social Security and Medicare on employees of States and their political subdivisions. States and political subdivision participate in those programs at their own election. The Supreme Court has never found that Congress may dictate insurance coverage to other sovereign entities.

    I see real federalism implications since imposing health care costs on municipalities may be budget busters. Congress may dictate what banks pay their executives, but Congress may not dictate what States, or other sovereign entities, pay their Governors.

    It is the States that have the unlimited sovereign power, not the federal government.

    I am an attorney for a small municipality of 4,000 residents that does not provide health insurance to its part time workers which make up 95% of its workforce. The legislation proposed will require coverage and will require the municipality to reduce services elsewhere, or require huge tax increases.

    I would imagine that there are many other municipalities in the same situation.

    In order to close budget gaps, various states are making their employees pay greater portions of their health insurance costs. On the flip side, the penalties on so called “Cadillac” health plans will affect states and municipalities which typcially provide lower wages than the private sector with greater pensions and benefits.

    Like Social Security, the proposed laws will have a great impact on state and municipal budgets. To survive Constitutional scrutiny, the Courts will require and opt in provision like Social Security. To do otherwise will be commandeering the states and municipal governments.