I am a guest on the latest edition of Lawyer2Lawyer, a podcast talk show on the Legal Talk Network hosted by fellow Bay State blawger Bob Ambrogi and Golden State lawyer Craig Williams, discussing aspects of the Massachusetts health reform plan, national health reform, and the lawsuit brought by their other guest, Michael Merlina, who is representing himself in seeking to overturn the denial of his application for a hardship exception from the individual mandate portion of the Massachusetts law. He and his wife are being fined a little under $2000 because he says they can't afford a policy that would cost them a little over $5000. Thus far, he reports that the state agency that denied his application has been ordered to review it again and provide a detailed response. To listen to the show or download the podcast, go here.
Interestingly, Merlina is not challenging the individual mandate, just the application of the hardship exception rules to his situation. As I have noted in the past, the Massachusetts law is theoretically open to challenge as being pre-empted by ERISA, but the realpolitik behind the coalition that ensured the law's passage has eliminated the risk of that sort of broad-based challenge — at least it has to date.
Even more interesting, if you think about it, is the fact that the principal argument against health reform at the national level — i.e., the individual mandate violates the Commerce Clause because stuff like this is supposed to be left to the states — runs smack up against the principal argument against state and local health insurance mandates — i.e., the mandate is pre-empted by ERISA because the federal government has claimed the entire field as it relates to health insurance. (And, um, let's not forget that the federales get to have laws like ERISA in the first place because of … the Commerce Clause!) Thus, carried to their logical conclusion, these arguments mean that neither state nor federal government may impose an individual mandate. If that's the case, then, to quote the Immortal Bard, Something is rotten in the State of Denmark (and Massachusetts, and Maryland, and California . . .).
Meanwhile, back in D.C., the Supremes recently let stand (by a 7-2 vote) a lower court ruling permitting intrastate regulation in the face of a Commerce Clause challenge (state law banning body armor possession by convicted felon survives challenge asserting in-state possession of body armor has nothing to do with interstate commerce). The readers of entrails out there seem to think this bodes well for the health reform law (except for those who don't) when the challenges to the individual mandate come before the Supremes, probably in a year or so.
Bob posed the question that should be on everyone's minds as we get deeper and deeper into the Massachusetts model on a national scale: How could we structure this all differently so that everyone gets health insurance and there aren't so many rules, categories, exceptions, and cracks to slip through? Well … a single payor system would do that, and would save a bundle on administrative expenses, to boot. Will that ever happen in this country? Not any time soon.
The Harlow Group LLC
Health Care Law and Consulting
Brad F says
Listened to podcast by way of HWR. Interesting, and I have a question.
I remember reading sometime back that Mass vetted the ERISA issue with feds in detail in order to go forward with plan. State created a firewall (cafeteria plans?) so to speak, and this was above board. No? Perhaps it is iffy and has not been challenged, and that is what I am missing?
Also, the fed vs state issue, and standstill (commerce clause vs ERISA), is interesting as well, and you seem to indicate in interview that it is potentially an invitation for casting the mandate overboard. Again, perhaps I am misreading, but this is a conundrum that cant stand, and I would think that legally, contentious or not, a solution needs finding if legal challenge is introduced. A world of “no path forward” is a Catch-22 that is unacceptable. do you agree?
David Harlow says
Thus far no one has challenged the Massachusetts approach, though there are those who think it’s ripe for challenge http://j.mp/fJKJvg (two years ago and counting; still waiting for a plaintiff to show up) and those who think not: http://j.mp/fJKJvg
It is the nature of our system that unless successfully challenged in court or repealed by later legislative action, the law stands. To date, no one has initiated either approach to overturning the Massachusetts law. This says to me that all interested parties view the law as a reasonable solution to an otherwise intractable problem, and are willing to maintain a cease-fire.