State Legislators Try to Preempt Federal Healthcare Reform

(MoneyWatch)  There has long been talk in conservative circles that the central tenets of Democratic healthcare reform legislation are unconstitutional, because they allegedly infringe on states' rights. Now the American Legislative Exchange Council (ALEC), a group of state legislators with right-wing connections, has prompted lawmakers in a dozen states to introduce legislation that would try to short-circuit federal reform by reasserting state authority over health insurance. According to ALEC, legislators in another 12 states are in the process of filing similar bills.

The template for these measures can be found on the ALEC website. In a resolution that opposes the proposed health insurance exchanges for individuals and small companies, as well as the now-moribund public option, ALEC argues that "both proposals represent a federal takeover of states' current role in regulating health insurance." The organization asserts that these provisions violate the tenth amendment to the U.S. constitution, which reserves to the states all rights not granted to the federal government. Specifically, ALEC alleges that "a federal exchange would undermine states' oversight role in health insurance and cause a substantial shift in the regulation of the health insurance market from the states to the federal government."

A bill introduced in the South Carolina legislature--said to be typical of measures in other states-would reportedly amend the state constitution so that it "preserves the rights of individuals to pay directly for medical care-something not allowed in single-payer countries like Canada-and prohibits any individual from being penalized for not purchasing government-defined insurance." The idea is to set up a legal clash with the federal reform law (assuming that one is passed) and have the courts rule on the constitutionality of the insurance reforms.

Meanwhile, the blogosphere is buzzing over reports that the insurance industry-represented by the Blue Cross Blue Shield Association-is the force behind the ALEC resolution and the ensuing state legislation. Lee Fang at ThinkProgress discovered that ALEC's Private Sector Executive Committee, which he says developed the states' rights resolution, includes Joan M. Gardner, executive director of state services with BCBSA's Office of Policy and Representation. According to Fang, Christie Herrera, the director of ALEC's healthcare task force, "confirmed that Gardner played a pivotal role" in crafting the resolution. Therefore, Fang maintains, any support that the insurance industry shows for healthcare reform is a sham.

In response to the flap over the ALEC resolution, BCBSA provided this statement:

"The American Legislative Exchange Council (ALEC) is just one of the many national organizations of state officials and other groups that the Blue Cross and Blue Shield Association partners with. The Association does have representation on the Executive Committee of the Health and Human Services Task Force [of ALEC] but has not taken a position on the ALEC 'Freedom of Choice in Health Care' model. The Blue Cross and Blue Shield Association strongly supports healthcare reform that improves quality, reins in costs and expands coverage to everyone."

Whether or not the insurance industry is secretly trying to sabotage reform, it has publicly attacked key portions of the Senate bill. Among other things, America's Health Insurance Plans (AHIP) has claimed that the measure would raise insurance costs because insurers would have to accept people who did not have to buy insurance until they became sick. And BCBSA cites a private study to support its contention that the bill would jack up premiums for all individually insured people.

Nevertheless, the association's possible role in the ALEC maneuver does raise suspicions that the industry is hedging its bets, just in case healthcare reform passes.