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.