Health Reform Lawsuit

April 8, 2010

Transcript:

Ted Simons: The state has joined more than a dozen others in suing the federal government over healthcare reform. The suit alleges that states have the right to regulate healthcare and that the federal government overreached by requiring people to buy insurance. Here to discuss the merits of the lawsuit is Arizona State University law professor Paul Bender. Good to see you again. Thanks for joining us.

Paul Bender: Good to see you.

Ted Simons: This has two components.

Paul Bender: The lawsuit.

Ted Simons: We want to make sure that's clear.

Paul Bender: One is the so-called individual mandate which will require a few years from now, everybody to have a health insurance policy. A standard, minimum federally required health insurance policy. And the other part is to challenge the part of the bill that says states must maintain their Medicaid rolls -- here it's AHCCCS -- must maintain those programs with the current -- when the act is passed -- coverage, of people. And they can't diminish it. If they do, all Medicaid funding will be cut off. The states are challenging that threat to cut off all Medicaid funding.

Ted Simons: What are your thoughts on that?

Paul Bender: The second aspect?

Ted Simons: The federal mandate.

Paul Bender: In a spending program, congress can condition its spending as long as the condition is related to the program. Here, the spending program is Medicaid and it's a big program. A federal-state cooperative program and congress has always conditioned that money on the states chipping in and keeping up to certain standards. So it would seem that this lawsuit doesn't have much of a chance because there are conditions on spending. If every government says you want this money, do it, don't, then don't -- we're not forcing you to do anything. But the states argue, in fact, you're forcing us and we've had the Medicaid program for a long time and the people rely on and we can't afford to run it by ourselves so we're being coerced and that to my mind is not frivolous. If it succeeded, it would be the first time it succeeded but seems to me it has substance because the state is caught in a bind. It cannot practically get out of Medicare and in order to stay in, it has it trim its rolls. So that federal lawsuit is one that's going to be taken serious. The other one, the individual mandate, I don't think will be taken serious for three reasons. One, this is a suit brought by the states to prevent the federal government from compelling individuals to buy health insurance. What's the state's standing to challenge that? The people who should challenge it would be the people who don't want to get health insurance. We don't know if there are any such people. It doesn't take effect for a few years. So I don't see the state's standing to raise it and it's premature. I would think you would wait until the program goes into effect and see if there are people who don't want to do it and see how they're treated. And the challenge won't work anyway, because the federal government has power under the commerce clause to impose that kind of requirement on people. It's important if you want a coherent, workable national health insurance policy that everybody gets covered.

Ted Simons: In terms of being a tricky aspect of the lawsuit, you're saying the de facto mandate to the states regarding Medicaid as the one that could possibly raise eyebrows and get some attention?

Paul Bender: To me, that's the more substantial part. And raises what the court has never really decided but hinted it would. The leading case is a case that chief justice Rehnquist wrote which involved the cutoff of federal highway funds to states that didn't raise the drinking age to 21. But at the end, he says this isn't coercing the states because they're only losing 5% of the highway money. That's not a lot. So they really have a choice. If we were really coercing them, it might be a problem. And then the question becomes, can the federal government force the states to do Medicaid coverage? There are some who say that the federal government can't force the state affirmatively to do something. They can't make the states legislate or cover somebody. But to force a state to do that is co-opting the states is what the Supreme Court has said. If you add the coercion to the co-opting effect, you got to do this, it seems that would be a lawsuit taken seriously.

Ted Simons: Arizona officials decided to go ahead with this, that Arizona is uniquely challenged, the Medicaid aspect of it, is he correct?

Paul Bender: We have a more sympathetic case because our Medicaid has been more expansive because of the initiative that expanded the rolls so the legislature wants to cut it back to where a lot of other state programs are. And they're going to argue, we voluntarily did more, why can't we cut back? And in my view, the legislature is cutting 300 people off the AHCCCS rolls violates the state constitution. That programs adopted by the voters through an initiative election, the legislature cannot repeal or change. Significantly. And this would be a repeal of that addition to the rolls. They have a theory how they can do this. But I think probably they're not -- they are repealing it. And I think that violates the state constitution and they can't do this. So the lawsuit most important here would be a lawsuit saying that the state cutting back the rolls violates the state constitution and the state has to find some way of funding those things because it was adopted by the voters and can only be repealed by the voters.

Ted Simons:If one of two aspects, if it succeeds, probably won't, but if it does happen, is that a house of cards? You pull one away and the whole thing tumbles?

Paul Bender: No, that doesn't happen. They have severability clauses. The rest will be there. That one is so closely related that one can't stand without the other, that's not true here. If the mandate failed and Arizona can keep -- the healthcare bill would still stand.

Ted Simons: Very good. Thanks for joining.