Last week, Virginia became the first state in the nation to pass a law that aims to block the individual mandate for health coverage, a key element of President Obama’s health reform plan.
Virginia has a history of defying federal action—most notoriously when the state failed to follow school desegregation orders in the 1950’s. But this time the state is not alone in launching legislation to challenge key elements of federal health reform. On March 9, Utah and Idaho both passed bills through their state assemblies that would invalidate the individual mandate that people buy health insurance. Similar “health care freedom” legislation—in the form of statutes and ballot measures—has now been proposed in some 34 other states.
Supporters of Virginia’s bill say it is rooted in the Constitution's 10th Amendment that outlines state’s rights. Specifically, the bill states that “no law shall impose a penalty, tax or fine upon an individual who declines to contract for healthcare coverage or to participate in a healthcare system or plan.”
Recent media reports have framed the rash of “health care freedom” bills as a direct challenge to federal health reform efforts—setting up a state vs. feds showdown that could culminate in a battle before the Supreme Court. In a recent article, the Boston Globe calls the advent of these state measures to outlaw the federal health insurance mandate very significant, “possibly setting the stage for one of the greatest tests of federal power over the states since the civil rights era.”
In actuality, most of these statutes and amendments were not designed for their federal impact; they were actually drawn up in response to the insurance mandate that was part of the 2006 Massachusetts health plan.
“Throughout 2009, sponsors of these bills in places like Arizona and Utah told us that they were concerned and had a goal of preventing a state reform in the style of Massachusetts,” says Richard Cauchi, Health Program Director at the National Conference of State Legislators.
Many of these states have based their legislation on a model bill called “Freedom of Choice in Health Care Act" that was drafted by the American Legislative Exchange Council (according to SourceWatch, “a conservative organisation that pushes legislation that favours big business.”) The language in this model bill was originally designed to oppose state health reform efforts that might create a single-payer system or a mandatory public option. Neither is currently included in the Senate version of reform.
State laws like the one passed in Virginia will ultimately not derail the health reform process, says Timothy Jost, a legal scholar at Washington and Lee University School of Law. “State law cannot nullify federal law. This principle is simply beyond debate, and state legislators, many of them lawyers, know that,” writes Jost in the New England Journal of Medicine. “The purpose of these laws, therefore, is not legal but rather political.”
The thinking is two-fold: First of all, states use these bills to send a message to their Congressional delegates, letting them know that many voters back home oppose health reform. In Virginia, for example, five Democratic members of the state Senate voted for the anti-mandate bill. Secondly, should health reform pass, the state bills “can thus be seen as invitations to civil disobedience that counsel state citizens to ‘violate the federal law, wave this statute in their face, and dare them to come after you,’” says Jost.
The individual mandate is fundamental to the success of the administration’s vision of comprehensive health reform. If, by law, insurers are required to cover everyone—even the very sick and those with pre-existing conditions—than they must also have the young and otherwise healthy Americans paying into the system to keep it solvent and to maintain affordable premiums. The Senate bill (as well as Obama’s proposal) sets up the penalty for individuals who do not have health coverage as a tax—up to a maximum of 2.5% of family income by 2016.
According to Jack Balkin, a constitutional law professor at Yale who wrote about the constitutionality of the individual mandate for the New England Journal of Medicine:
“Congress has the power to pass legislation that falls within any of its powers enumerated in the Constitution. There are two obvious sources of congressional power. The first, described in the General Welfare Clause, is the power ‘to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defence and general welfare of the United States.’ The second, laid out in the Commerce Clause, is the power ‘to regulate commerce . . . among the several states.’”
Balkin argues that by insuring more people and preventing insurers from denying coverage because of pre-existing conditions, the health reform bill does serve the “general welfare.”
“The tax gives uninsured people a choice. If they stay out of the risk pool, they effectively raise other people's insurance costs, and Congress taxes them to recoup some of the costs. If they join the risk pool, they do not have to pay the tax. A good analogy would be a tax on polluters who fail to install pollution-control equipment: they can pay the tax or install the equipment.”
Balkin believes that Congress also has the power to impose the tax under the Commerce Clause. The reasoning is complicated; but basically, “Because Congress believes that national health care reform won't succeed unless these people are brought into national risk pools, it can regulate their activities in order to make its general regulation of health insurance effective.”
Balkin concludes; “To strike down the individual mandate, [the Supreme Court] would have to reject decades of precedents. It is very unlikely that there are five votes on the current Court for staging such a constitutional revolution.”