States Challenge Federal Health Care Reform

State eNews Issue #45, April 29, 2010

So far, 21 states led by their attorneys general are challenging the federal health care reform law, saying the law is unconstitutional in expanding Medicaid, putting a burden on the already cash-strapped states. Other states may join.
Attorneys general in Alabama, Alaska, Arizona, Colorado, Florida, Georgia, Idaho, Indiana, Louisiana, Michigan, Mississippi, Nebraska, Nevada, North Dakota, Pennsylvania, South Carolina, South Dakota, Texas, Utah and Washington have all banded together in a lawsuit originally filed March 23 by Florida Attorney General Bill McCollum.
Virginia is also challenging the law, but in its own separate case filed in U.S. District Court in Richmond, Va.
While the number of states challenging federal health care reform is impressive—it represents more than 40 percent of states—some say the legal case against the law doesn’t really have legs to stand on. Governors of some states have vowed not to join the lawsuit.
Even though Wyoming Gov. Dave Freudenthal has said he won’t join the lawsuit, residents started a petition to join, according to the Wyoming Tribune Eagle. Whether Freudenthal’s decision will be reversed is up in the air. At this time that decision has not been made, according to the Freudenthal’s office.
“As I view it, it is pretty hard to see how the suit succeeds,” said Alan Weil, executive director of the National Academy for State Health Policy and a lawyer by training.
He said the legal challenge faces several issues. First, federal law is supreme, Weil said, and the states are trying to stop a law that hasn’t even been implemented. Also, there’s been a lot of focus on the mandate requiring all Americans to have health insurance, but the penalty is a financial one—as opposed to incarceration, for example—which has different legal standards, Weil said. 
“It’s pretty hard to see this going the way of success and this stage,” he said.
“Regardless of the outcome of the states’ challenge on health reform, the case itself could serve to define the state-federal relationship for decades to come,” said Chris Whatley, director of The Council of State Governments Washington, D.C., office. Whatley tracks state-federal relations issues. 
That federal-state relationship is something very inherent in Virginia’s separate legal challenge against federal health care reform.
That’s because Virginia already passed its own law—the Virginia Health Care Freedom law—that says requiring individuals to purchase health insurance or forbidding individuals from purchasing services outside the required health care system is unconstitutional, according to the American Legislative Exchange Council, which provided model legislation for the bill.
“Virginia is the only state so far to pass a law protecting its citizens from a government-imposed mandate to buy insurance. Of course, the federal health care bill includes an individual mandate to do exactly that, forcing individuals to buy health insurance. This sets up a conflict between the federal health care law and Virginia’s Health Care Freedom Act,” Virginia Attorney General Ken Cuccinelli said in a video release.    
The federal government has 60 days to officially answer the lawsuit—an answer is expected by late May.
Normally, the federal government would almost automatically win an argument like this because of the supremacy clause of the U.S. Constitution, Cuccinelli said. But Virginia’s lawsuit, filed by Cuccinelli, says the health care reform legislation isn’t even constitutional.
Legal fights aside, much of the specifics of the law have yet to be worked out, Weil said. That process could directly involve states.
“There’s a huge amount about how the law is going to be implemented that is not yet decided. States have in many issues over the years been a very strong voice for both the rulemaking process and in modifications to law when it really didn’t work over time,” Weil said. “But you have to be engaged to do that.”
Weil worries that states legally challenging the law won’t be engaged in the rulemaking process and pass on the chance to have a say in how federal health care reform really plays out.
CSG Resources
Other Resources