A potential San Francisco treat?

Promising news from the ERISA lawsuit on the Healthy San Francisco plan at the Ninth Circuit Court of Appeals. Yesterday, a three-judge panel ini Pasadena heard arguments about whether it should stay the ruling and let San Francisco proceed with the employer contribution of its new health plan.

So while no rulings were made, on the stay or the substance of the ERISA challenge, it seemed the judges poked holes in the logic of the opponents of San Francisco’s health reform. Bob Egelko at the San Francisco Chronicle has the intriguing write-up.

Court gives San Francisco health plan a boost
Bob Egelko, Chronicle Staff

Friday, January 4, 2008

PASADENA–A federal appeals court boosted San Francisco’s hopes Thursday of reviving its plan to extend health coverage to all uninsured residents and make employers share the cost.

Members of a three-judge panel of the Ninth U.S. Circuit Court of Appeals made it clear they thought U.S. District Judge Jeffrey White was on shaky ground last week when he struck down a key funding provision of the health program, which would require medium and large companies to offer insurance to their workers or pay a fee to the city.

Ruling in a lawsuit filed by the Golden Gate Restaurant Association, White said San Francisco was trying to require employers to provide a specific level of health benefits. That violates a 1974 law prohibiting state and local governments from regulating employee benefit plans, White said.

But San Francisco’s lawyers argued – and the appeals court judges appeared to agree – that White had misread the law. The city says the law provides only that employers must spend a certain amount on health care, either in coverage for their workers or in payments to the city.

That’s a crucial distinction under past U.S. Supreme Court rulings that have given states and cities some leeway to pass laws protecting their inhabitants’ health and welfare, said Judge William Fletcher. If the city’s interpretation of its law is correct, he said, “that takes away virtually all of Judge White’s reasoning.”

When Richard Rybicki, lawyer for the Golden Gate Restaurant Association, conceded that the city was reading its ordinance accurately, Fletcher said, “It seems to me your argument just disappears on you.”

Rybicki argued that the San Francisco ordinance still intruded too deeply into employers’ health care decision-making and would contradict Congress’ goal of national uniformity in health plans. But Fletcher and the other two panel members, Judges Stephen Reinhardt and Alfred Goodwin, seemed skeptical.

The court gave mixed signals on whether it would grant the city’s request for an emergency order suspending White’s ruling and allowing the ordinance, including the employer fees, to be fully implemented during the appeal process.

But the judges’ questions and comments during the one-hour hearing in Pasadena suggested that the court was prepared to interpret the 1974 federal law in a way that leaves room for universal, shared-cost health coverage at the state and local levels, in the absence of a national health care law.

For those who are supposedly so confident that any attempt at health reform will run afoul of ERISA (I’m looking at you, Chris Reed), this hearing should give pause that some judges who matter might not be so sure

There’s no ruling to celebrate, and just like we said with Judge White’s lower court decision, there’s still a long way to go in the legal review of the San Francisco case, as well as statewide health reforms. But it’s clear there’s an opening, and the question is how big that opening is, and what is the right policy that is able to make it through.

The San Francisco Chronicle editorial board makes it clear why this legal inquiry is so important, well beyond the city’s borders.

Health Access California promotes quality, affordable health care for all Californians.
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