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July 20, 2006
Score One For the Feds
In continuing with health wonkery day, let's turn to the judiciary's rejection of Maryland's fair share law. This is going to be a hard one, but liberals should probably celebrate today's ruling that the Employment Retirement Income Security Act (ERISA) supersedes the Maryland law forcing Wal-Mart to pay into a health fund. ERISA allows for uniformity across a single company's nationwide benefit plans so employers don't have to face down new regulations in every state. The Wal-Mart bill, according to the Court, violated that legislative intent. By contrast, the judge wrote that something like the Massachusetts reforms do not, because they were an example of "states [performing] their traditional role of serving as laboratories for experiment in controlling the costs and increasing the quality of health care for all citizens," and were not, in intent, clear violations of ERISA.
So why should liberals rejoice? Well, though a piece of friendly legislation was knocked down, the active principle behind the Court's ruling is a supportable one. If states were able to invalidate federal health care statutes, any sort of truly universal or comprehensive reforms would crash on the shoals of a thousand commerce clause challenges. The eventual aim is to smooth the disjointed patchwork of state, local, and private care systems and replace it with something more standardized, navigable, and comprehensive. For that to be possible, the federal government needs to retain its authority to trump state legislation. If the Maryland bill -- which was neither a good bill nor particularly important -- is our only casualty in that fight, liberals will have gotten off easy. The only real downside here is that this sort of legislation will no longer be available as a cudgel against Wal-Mart. On the other hand, the unions can now start roaring about evil activist judges of their own.
Cross-posted at Tapped
July 20, 2006 | Permalink
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Comments
Grrr .... that seems really specious. The difference between the Maryland system and the Massachusetts system is just who pays, right? They're both "provide health insurance or pay the state government", right?
Posted by: Nicholas Beaudrot | Jul 20, 2006 3:22:04 PM
Not really. The Maryland law singles out a certain type of corporation for punishment -- in that way, it's a law concerning corporate health insurance. The Mass law is a different way of providing health insurance where the employer's role is actually ancillary. Indeed, you could strike down the employer portion of the law without substantially changing it.
Posted by: Ezra | Jul 20, 2006 3:44:20 PM
Ezra,
I'm not as optimistic as you seem to be about the glories of uniformity at the federal level. After all, there's nothing inherent in uniformity per se that makes it any more likely that people will receive better health coverage under a uniform system. "Standardized" and "navigable" I'll give you, but not necessarily more "comprehensive."
The best example of this is ERISA itself. ERISA preemption of state law has meant, much more often than not, that an HMO contracted with an employer to provide health benefits is allowed to deny services without fear of state-law reprisals, and without fear of any liability for consequential damages under ERISA. It's the old "black hole," and it exists because of extensive federal preemption of state law.
Of course, it's possible that if ERISA didn't exist, the increased costs of complying with a patchwork of state regulations would mean that employers would be forced to offer fewer health benefits than they would have otherwise. But I don't think that's likely -- employers don't automatically offer more benefits when they become cheaper. And I doubt that ERISA makes benefits packages all that much cheaper anyway, given the already substantial apparatus that most multistate employers have already developed to deal with differing state regulations.
Posted by: Carey | Jul 20, 2006 8:41:29 PM
I agree with Carey and Nicholas that your argument is pretty weak here. I would also add that this court's interpretation of ERISA is suspect: ERISA was desigend to provide uniform minimum standards for the regulation of employer provided benefits. ERISA does not require that any actual benefits be provided by any employer, it just regulates how those benefits are administered if they're offered. I don't see why mandating that companies provide some minimum benefit would be at odds with ERISA at all, any more than states passing higher-than-federal minimum wage laws would violate FLSA. Indeed, I would not be surprised if, should this decision stand, it ends up being used to challenge high state minimum wages. Provided that the statute is silent about how a health care plan is administered (ERISA's business) simply requireing that they have one that meets standards on which ERISA is silent seems to me as though it ought not be preempted.
Posted by: Rich C | Jul 21, 2006 12:16:31 AM
Nonsense, Ezra -- and Judge Motz (author of the RILA v. Fielder ruling).
Both of you are wrong; Fair Share could not possibly have forced employers like Wal-Mart to change their national health benefit plans to suit a state mandate -- because Maryland gave them a choice: either up the ante or pay the shortfall into a Maryland Medicaid fund. That is, Fair Share was a take-it-or-leave-it, makes-no-difference-to-us incentive to improve health benefits. If Wal-Mart (or any other affected company) so chose, it could save itself all that paperwork and just cut the Medicaid fund a check, leaving its health benefit structure untouched. If it wanted that money to "at least" be paid out to its own workers, well, that would be a nice outcome too.
Posted by: Thomas Nephew | Aug 3, 2006 11:09:58 PM
