Conservative Principles Now

The Washington Post reports that the Virginia Senate passed a measure yesterday that that would prohibit the imposition of the individual mandate — a feature of both the current House and Senate health care bills. Besides being the first state to adopt such a measure, it is especially remarkable coming out of the Virginia Senate, where Democrats hold the majority. As The Post reports, the measure came “less than a week after President Obama implored Democrats in Washington not to abandon their health-care efforts” during the State of the Union.

According to another story in the Associated Press, an increasing number of state legislatures have begun considering such legislation. The individual mandate — which would force all U.S. citizens to purchase health insurance — has outraged many Americans and has led to a public backlash against the proposal.

According to the AP:

Lawmakers in 35 states have filed or proposed amendments to their state constitutions or statutes rejecting health insurance mandates, according to the American Legislative Exchange Council, a nonprofit group that promotes limited government that is helping coordinate the efforts. Many of those proposals are targeted for the November ballot, assuring that health care remains a hot topic as hundreds of federal and state lawmakers face re-election.

…

Supporters of the state measures portray them as a way of defending individual rights and state sovereignty, asserting that the federal government has no authority to tell states and their citizens to buy health insurance.

“I think the alarm bell has been rung,” said Clint Bolick, the constitutional litigation director at the Goldwater Institute in Phoenix, which helped craft an Arizona amendment on this November’s ballot that has been used as a model in other states.

“These amendments are a way to manifest grass roots opposition” to federal health insurance mandates, Bolick said. “They kind of have a life of their own at this point. So while some of the pressure may be off, I think that this movement has legs.”

There is some discussion as to whether these measures, even if adopted, will have much effect if Congress manages to pass a health care bill with an individual mandate.

“They are merely symbolic gestures,” said Michael Dorf, a constitutional law professor at Cornell University. “If this Congress were to pass an individual mandate, and if it is constitutional — which I believe it is — the express rule under the supremacy clause (of the U.S. Constitution) is that the federal law prevails.”

However, as Professor Dorf points out, whether these measures are symbolic or not hinges on whether a federal mandate is Constitutional, something about which Heritage has serious doubts. Regardless of whether these measures turn out to have teeth or not, they are yet another sign of the anger many Americans have towards Obamacare. A sign that the President and Congressional leaders would be wise not to ignore.

In the wake of widespread public backlash over his eleventh-hour deal to get increased federal taxpayer Medicaid funding for his vote, Sen. Ben Nelson (D-Neb.) has been hitting the media circuit, assuring reporters that he won’t vote for any merged health care bill that funds abortions with taxpayer dollars or has a government-run health insurance plan.

“There is zero chance (of a public option),” he said to The Chadron Record. “I’ve made it so clear. It isn’t going to happen.” But Sen. Nelson has already allowed a “public option” to flourish by voting for the Senate version last month.

Medicare, for example, is the quintessential public plan. Instead of the Medicare bureaucracy contracting with private carriers to provide health coverage, as it does today, the latest Senate bill turns that responsibility over to the Office of Personnel Management (OPM), the agency that runs the federal civil service and the popular Federal Employees Health Benefits Program (FEBHP). Under the Senate bill, OPM would sponsor two “multi-state” health plans —one of which must be nonprofit — to compete against private plans in the country.

In other words, there could be health plan competition on a national level in every state, but only the federal government would field these national health plans. These government-sponsored health plans would have an exclusive franchise: No private health plans would be able to compete in the same way as the selected health plans sponsored by OPM. In effect, the Senate bill creates a set of “public options” that are thinly disguised as private health plans.

“If the Senate bill becomes law, OPM would not merely serve as an umpire overseeing the competition among private health plans within the FEBHP,” says Kay Cole James, a former OPM director who has warned about this latest congressional tactic to achieve a public plan. “The agency also would become the government’s health-plan sponsor.”

That means this federal agency could field its own team of players, while setting premiums and making other rules for its sponsored health plans, competing against the existing private plans in every state of the union. If OPM officials manipulate the rules, and secure special advantages for its health plans, it could just as easily undercut private health plans and drive many insurers out of the market, James said. “What we’ll see is a stacked insurance market that favors a government-operated ‘private plan.’”

“Sen. Nelson, I ran the OPM, and I can tell you that the Senate’s OPM sponsored plan is not an alternative to a government-run health plan — it is the ‘public option,’” James charges.

Nelson and other senators should not be under the illusion that OPM’s new role is just like its old role in administering the FEHBP. The new role is very different, and is likely to consume a great deal of time, and energy and effort as the government’s player in the nation’s health insurance markets. Under current law, the agency plays the role of the federal government’s employer, providing different private health plan options that compete for federal workers, their families and retirees on a level playing field. The Senate bill language, however, not only authorizes OPM to become a health-plan sponsor, it also provides only sketchy solvency requirements for these health plans, as detailed by Heritage analyst Ed Haislmaier.

Haislmaier didn’t find any language in the provisions that prevents a run on the U.S. Treasury if either of OPM’s government-sponsored health plans faced shortfalls. It sets the country up with another industry where the government would decide what entities would be “too big to fail.”

Co-authored by Marguerite Higgins