Wisconsin AG to Accountable Care Act: “You’re dead to me…”

Well, Wisconsin Attorney General, J.B. Hollen didn’t use those words exactly. But on Wednesday, his office released this brash statement; “for Wisconsin, the federal health care law is dead—unless and until it is revived by an appellate court. Effectively, Wisconsin was relieved of any obligations or duties that were created under terms of the federal health care law.”

Hollen was no doubt emboldened by this week’s ruling in Florida by district court judge Roger Vinson that the entire health care reform law is unconstitutional. This decision went beyond Judge Henry Hudson’s ruling in a Virginia court in December that found only the individual mandate to be unconstitutional. “This is a radical decision,” Timothy Jost, a law professor at Washington and Lee University School of Law writes in his analysis of the ruling in Health Affairs. “Judge Vinson has a clear vision of the limited federal government the founders intended that is very much in line with that espoused by the Tea Party Movement…He has thrown down the gauntlet.”

The ruling has emboldened others besides Wisconsin to swear off implementing reform. Florida Governor Rick Scott announced that he would wait for further court rulings before beginning to take any action to carry out the health law. And the Florida insurance commissioner Kevin McCarty wrote to federal officials on Tuesday letting them know that the state will return a $1 million grant intended to help it prepare for reform by setting up a system that would let consumers compare insurance plans. Wisconsin also announced it’s sending back the money. Finally, Minnesota’s Governor Tim Pawlenty issued an executive order barring state officials from participating in the ACA without express approval from his administration.


Most of this is clearly bluster. How, besides giving up the $1 million grant, do these renegade states intend on blocking implementation of health reform? Insurance companies administering large group plans in these states are regulated by the federal government and will still have to abide by the ACA’s provisions to insure children with pre-existing conditions, let 18-26-year olds stay on their parent’s plans and remove annual and lifetime coverage limits. Medicare is also a federal program, so the ACA provisions that have already gone into place—free preventive care for seniors, $250 rebates from the drug benefit program, etc.—will stand unless the states decide to block them (a move that would be wildly unpopular with voters.) Would the states also have to shut down their high-risk insurance programs that use federal funds to provide more affordable coverage to individuals with pre-existing conditions?

The $1 million grant for setting up health exchanges is just a drop in the federal outlay bucket—at least for Florida, Igor Volsky writes on the Wonk Room blog. Volsky breaks it down in detail, and he estimates that Florida has actually received federal grants worth $45 million for hospitals and academic medical centers as a result of the health reform legislation. Good luck prying that money away.

Judge Vinson did not issue an injunction to formally prohibit implementation of the ACA, but that’s because he made the assumption that claiming the ACA to be unconstitutional would bar federal officials from further implementing the law. The Justice Department (representing the administration) is expected to seek a “stay” (a court-ordered delay) on the Florida ruling to keep health reform moving forward at least until the case moves through the appeals court.

The ruling also doesn’t apply to Medicaid. According to the Washington Post, “Vinson, however, upheld the law's expansion of Medicaid, the public insurance program for the poor and disabled that is jointly funded by the states and the federal government. He rejected the states' argument that the expansion infringes on their sovereignty.”

David Rivkin, a lawyer representing the 26 states involved in the Florida lawsuit, said that in light of the decision, all of them should immediately halt implementation of the health care law. In reality, besides the handful of noisy dissenter states, the majority of the 26 involved in the suit will not heed Rivkin’s call. “Most states don’t want to jump out and do something that will result in a penalty,” says Joy Johnson Wilson, health policy director for the non-partisan National Conference of State Legislatures.

For example, Johnson points out that since Judge Vinson did uphold the constitutional basis of the health law’s expansion of Medicaid, “If states were to breech maintenance of effort on Medicaid [i.e. decrease enrollment, cut basic benefits, etc.), they would risk losing federal funding for the program altogether.”

Many of the states that are participating in lawsuits challenging the individual mandate or the health law in general are quietly moving forward in setting up health insurance exchanges, forming commissions to figure out how to extend Medicaid benefits and otherwise planning for reform’s implementation.

Texas Governor Rick Perry has made no secret of his disdain for the health reform law, calling it a “federal intrusion into the lives of every American.” Yet his state is moving along on setting up a health insurance exchange and does not plan on returning federal money. The same is true for the two-dozen or so other states that have either passed or introduced versions of the “Health Care Freedom Act”— state legislation barring the individual mandate and other major provisions of the ACA. These laws are all modeled after a draft drawn up by the American Legislative Exchange Council, a group that counts conservative state legislators and lobbyists from the country’s biggest industries as members. Last month Wyoming went one step further, introducing the Health Care Choice and Protection Act, that would impose penalties on state-level implementers of the federal health law, including fines up to $5,000 and two years in a county jail, according to NPR. Federal officials would face up to five years in the slammer.

The fact of the matter is that federal law trumps state law in the case of the ACA and these laws are essentially meaningless, says Jost. “It's not over until the Supreme Court rules.”

If, as expected, the top court rules that the federal government has the right to regulate commerce, all of the state “freedom” acts will lead to nothing except the risk of an actual “government takeover” of health care. The ACA makes clear that if a state fails to set up a health exchange or refuses to implement other major components of reform like the individual mandate then the federal government will do it for them.

Yesterday Kenneth T. Cuccinelli II, the attorney general of Virginia, said that the opposing district court rulings (two decided the ACA is constitutional, two viewed at least major parts of it as unconstitutional) are sowing confusion among the public and state officials. To rectify the situation, Cuccinelli requested that the Supreme Court immediately review the health law instead of letting the various cases work their way through appeals courts.

“Currently, state governments and private businesses are being forced to expend enormous amounts of resources to prepare to implement a law that in the end may be declared unconstitutional,” Mr. Cuccinelli said in a statement.

The Justice Department rejects this need for expedited review by the Supreme Court, telling the New York Times that “the agency ‘continued to believe this case should follow the ordinary course’ so that legal arguments could be fully developed before being presented to the Supreme Court.” The idea is that the more Americans know about the health reform law and the more benefits they begin to experience from the legislation, the stronger the arguments for its need to stand.

According to Bloomberg; “The chances of the court agreeing to hear the case in the face of government opposition are ‘zero,’ said Carter Phillips, a lawyer in Washington at Sidley Austin LLP who has argued more than 60 Supreme Court cases.”

‘I do not think the court will be inclined to decide this question without the benefit of having the views of at least one and probably more than one court of appeals on a very difficult question of constitutional law,’ Phillips said.”

If the appeals process follows along the regular course, the Supreme Court will likely not hear the constitutional challenge to the ACA until 2012—right before the presidential election. According to
NCSL’s  Joy Johnson Wilson, even in the highly unlikely event that Cuccinelli achieves an expedited review, the Supreme Court will not thave an opening on its docket until this year’s fall term at the earliest. That will give proponents of the ACA more time to roll out benefits of the legislation and to convince more Americans that despite the rhetoric they’re hearing from upstart state legislators, the health care reform law is a keeper.

7 thoughts on “Wisconsin AG to Accountable Care Act: “You’re dead to me…”

  1. It would seem Mr. Hollen did not read the Florida ruling carefully enough.
    It specifically did not enjoin the government from implementing the ACA.

  2. Naomi:
    When courts [federal] disagree, SCOTUS is supposed to take action. If an Appeals Court does over rule or support Vinson, I suspect SCOTUS will take action sooner and before 2012. 85 cases for the Supreme Court is no great burden and this particular case will be pushed to the forefront as money dictates a quick resolution. The SCOTUS today is not the same as the one which ruled on Gideon v. Wainwright and it will react in a much quicker manner for the appropriate reasons.
    As to the ACA, here are the words of one constitutional attorney on its constitutionality:
    “Congress clearly could do this under its power pursuant to Article I, Section 8 of the Constitution to regulate commerce among the states. The Supreme Court has held that this includes authority to regulate activities that have a substantial effect on interstate commerce. In the area of economic activities, “substantial effect” can be found based on the cumulative impact of the activity across the country. For example, a few years ago, the Supreme Court held that Congress could use its commerce clause authority to prohibit individuals from cultivating and possessing small amounts of marijuana for personal medicinal use because marijuana is bought and sold in interstate commerce. The relationship between health care coverage and the national economy is even stronger and more readily apparent. In 2007, health care expenditures amounted to $2.2 trillion, or $7,421 per person, and accounted for 16.2 percent of the gross domestic product.” Erwin Chemerinsky http://www.politico.com/news/stories/1009/28620.html
    SCOTUS has also ruled on whether Congress can legitimately regulate insurance under the Commerce Clause in 1944.
    “In United States v. South-Eastern Underwriters Association (322 U.S. 533 (1944)), the Supreme Court of the United States ruled that insurance is interstate commerce subject to Federal regulation.”

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