I am disappointed that the LA Times/Political Muscle’s Bob Salladay didn’t challenge the San Diego Union-Tribune’s Chris Reed when repeating his assertions that health reform at the state level is not legal.
I’m not a lawyer, but given all the activity at the state level across the country, it doesn’t seem many agree with him. His entire argument is based on a split ruling by the most conservative appeal circuit in the nation, about a specific law in Maryland that is structured differently than the proposals in California, which is in a different circuit anyway.
It’s true that Maryland decided earlier this week not to appeal the court decision against their infamous “Wal-Mart law” to require the large retailer to spend at least 8% on health benefits. Reed compares the court decision–and I am not kidding or embellishing–to the Soviet tanks rolling into Prague as a final act against state health reform efforts.
We could get into the details of the federal ERISA law, but let’s quote the actual decisions:
* The lower trial court: “Of course, I am expressing no opinion on whether legislative approaches taken by other States to the problems of health care delivery and its attendant costs would be preempted by ERISA. For example, the Commonwealth of Massachusetts has recently enacted legislation that addresses health care issues comprehensively and in a manner that arguably has only incidental effects upon ERISA plans. In light of what is generally perceived as a national health care crisis, it would seem that to the extent ERISA allows, it is strongly in the public interest to permit states to perform their traditional role of serving as laboratories for experiment in controlling the costs and increasing the quality of health care for all citizens.” (From footnote 15)
* Characterizing and quoting the appeals court, the Center for Policy Alternatives writes: “The majority (2-1) opinion was written by a very conservative Reagan and Bush Sr.-appointed judge and was based on the assertion that “the Fair Share Act leaves employers no reasonable choices except to change how they structure their employee benefit plans…”, an assertion that is simply false (as the dissenting judge pointed out).
* From the the dissenting appeals judge’s statement: “Maryland is being buffeted by escalating Medicaid costs. The [Maryland] Act is a permissible response to the problem. Because a covered employer has the option to comply with the Act by paying an assessment — a means that is not connected to an ERISA plan — I would hold that the Act is not preempted.”
It’s about choices: The basis of the decision by the appeal court was that while there was technically an “option” for employers, it wasn’t “meaningful.” Their ruling was based on the notion that no employer would choose to pay the 8% assessment to the state, for which they or their workers get no benefit, rather than directly provide coverage to their workers.
In San Francisco, and to various extents in Massachusetts and Vermont, and what is being debated in various states including California by our Governor and legislative leaders, the employers who pay the fee get the benefit of a workforce with access to health care, a workforce that is healthy, more productive, and has less turnover and training costs. For example, the “pay or play” models give employers “reasonable” and “meaningful” choices to benefit their workers, and thus themselves. Employers have options to comply with these local proposals without impacting their national ERISA health plans.
On Reed’s challenge: Reed make a big deal that he can’t find a ERISA lawyer to endorse Schwarzenegger’s health plan. But lawyers are notorious about not giving a straight answer: most wouldn’t endorse an Arbor Day resolution without five caveats.
But to say that you can’t do state health reforms? I can find several through Google. Reed may be admitting he didn’t read the court decision: I quoted above the dissenting judge who is undoubtedly a lawyer, who seemed OK with Maryland’s law, even with its structure. Reed himself cites Pat Butler and other authors of various papers. And he mentioned that several states (Illinois, Pennsylvania, etc) have come out with their own proposals since the court decisions, and they all have their own legislators and lawyers in support.
California dreaming: Finally, Reed compares health reformers to the Dreamers during the Prague Spring, a time of creativity, liberalization, and openness before the Iron Curtain fell over Czechoslovakia.
But in the end, didn’t the Iron Curtain fall? Didn’t a playwright become president? Didn’t the Dreamers ultimately win?