More quixotic attempts to override the healthcare law
Wednesday, April 21st, 2010Louisiana is at it again. They are trying to pass legislation meant to overrule the new health reform law. Supporters of the bill believe that the Federal Government cannot compel citizens to purchase health insurance.
Some argue that since the government has the power to tax, that the mandate (and the fine attached for not being covered by health insurance) is just a tax and so it is constitutional. I suggest you read the article to learn about the current home-ownership and child birth mandates that currently exist in our tax system. It is also interesting to point out that people will be free to choose no insurance. They will just pay a fine for not buying that insurance.
Others argue that the interstate commerce clause grants the Federal Government the power to enforce a mandate on the citizens.
However, I am going to ignore that for a second. Let’s assume that the State of Louisiana has the power to overrule the mandate and the federal tax code and allow citizens to not be fined for refusing to purchase insurance. What will happen then?
Well, the Louisiana law would overturn the mandate while keeping the ban on pre-existing condition clauses intact. Citizens of Louisiana would be free to wait to buy insurance until they get sick. Since they cannot be turned away for their pre-existing conditions, insurance will stop being insurance in Louisiana and it will only be a kind of discount plan.
See, the reason that we used to allow pre-existing condition clauses is because we wanted to prevent anti-selection (the practice of waiting until you are sick to buy insurance). So if you eliminate those clauses, you need another way to prevent anti-selection. The only other way available is a mandate.
So what will happen is that private insurers offering individual health policies will stop doing business in Louisiana since they will no longer be able to protect themselves from anti-selection. No more private insurance would be made available in Louisiana. Louisiana will have driven the insurers out of our state.
However, as the Supreme Court said in Commonwealth Edison Co. v. Montana, the supremacy clause cannot be used to override state law unless
the nature of the regulated subject matter permits no other conclusion, or that the Congress has unmistakably so ordained.
So even if you want to argue that Congress has not unmistakably ordained that state law can be overridden using the supremacy clause, the nature of the regulated subject matter (health care) permits no other conclusion (than to mandate healthcare coverage since pre-existing condition clauses are banned). The mandate will stand and the state will waste more money trying to defend its quixotic legislation.

