RICHMOND, Va. (Jan. 7, 2016) – A bill prefiled in the Virginia House would prohibit state cooperation or implementation for most of Obamacare, taking a huge step toward nullifying the federal health care program in practice within the state.

Del. Brenda Pogge (R-Norge) prefiled House Bill 338 (HB338) on Jan. 5. The legislation would prohibit the state from using any personnel or financial resources to enforce, administer, or cooperate with the Affordable Care Act. The bill goes on to establish four specific areas of state noncooperation.

  1. Funding or implementing a state-based health care exchange or marketplace;
  2. Limiting the availability of self-funded health insurance programs or the reinsurance or other products that are traditionally used with self-funded health insurance programs;
  3. Funding or aiding in the prosecution of any entity for a violation of the Act, except as necessary to maintain the program integrity of the State Plan for Medical Assistance under Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq. (Medicaid), or Title XXI of the Social Security Act, 42 U.S.C. § 1397aa et seq. (CHIP); or
  4. Funding or administering any program or provision of the Act with a few specific exceptions.

From a practical standpoint, passage of HB338 could virtually shut down Obamacare in Virginia. The federal government depends heavily on state assistance to implement and enforce many aspects of the so-called Affordable Care Act.

The prohibition on state enforcement would prove particularly problematic for the federal government. Under the law, the Virginia Bureau of Insurance could no longer investigate or punish any violations of federally mandated health insurance requirements.

State insurance commissioners and departments serve as the enforcement arm for insurance regulations in the states. If HB338 passes, Virginians having issues with their mandated coverage will have to call the feds because disputes about these mandates arise under federal, not state law. The federal Department of Health and Human Services can’t commandeer the Virginia Bureau of Insurance and force it to investigate alleged violations of PPACA mandates. Congress passed a law and failed to establish any enforcement mechanism.

Additionally, the bill expressly prohibits the state from “Limiting the availability of self‑funded health insurance programs or the reinsurance or other products that are traditionally used with self‑funded health insurance programs.”

According to Jack Biltis at Forbes, “Moving to a partially self-funded (aka partially self-insured) plan allows an employer to overcome most of the burdensome regulations and taxes, potentially reducing insurance costs by 40 to 80 percent.” Self-insured health plans remain exempt from many of the taxes and mandates that Obamacare otherwise imposes on businesses and individuals. The NY Post called moving to these plans an “escape hatch.” And Obamacare supporters at the Center for American Progress said such moves to pose a serious threat to the viability of the federal act:

“The result of this shift could cause an insurance premium death spiral and threaten the stability of the exchanges—the health care law’s new insurance marketplaces.”

By preventing the state from taking actions to limit the availability of these self-funded programs, HB338 creates a firewall against what government-run health programs hope to do – increase both federal and state control over them.

The bill also expressly prohibits the creation or operation of a state health insurance exchange under the ACA. Virginia declined to create an exchange as Obamacare initially went into effect, but that does not mean a future governor won’t takes action to establish one. Creating a legislative prohibition would make it much harder to do.

Shifting the burden for health insurance exchanges to the feds helps overwhelm the implementation of Obamacare. Some analysts suggest that the feds only have the capacity to do so in 30-40 states over the long term, and any more than that will help collapse the system.

HB338 follows the blueprint the “Father of the Constitution,” created for resisting federal power. In Federalist 46 James Madison outlined several steps that states can take to effectively stop “an unwarrantable measure,” or “even a warrantable measure” of the federal government. Madison called for “refusal to cooperate with officers of the Union” as a way to successfully thwart federal acts.

A similar law went into effect in Arizona last year.

LEGAL BASIS

HB338 rests on a well-established legal principle known as the anti-commandeering doctrine. Simply put, the federal government cannot force states to help implement or enforce any federal act or program The anti-commandeering doctrine rests primarily on four Supreme Court cases dating back to 1842. Printz v. US serves as the cornerstone.

“We held in New York that Congress cannot compel the States to enact or enforce a federal regulatory program. Today we hold that Congress cannot circumvent that prohibition by conscripting the States’ officers directly. The Federal Government may neither issue directives requiring the States to address particular problems, nor command the States’ officers, or those of their political subdivisions, to administer or enforce a federal regulatory program. It matters not whether policy making is involved, and no case by case weighing of the burdens or benefits is necessary; such commands are fundamentally incompatible with our constitutional system of dual sovereignty.”

UP NEXT

HB338 will be referred to a committee when the 2016 regular session gets underway Jan. 13. It will need to pass committee by a majority vote before moving on to the full House for consideration.

If you live in Virginia: click HERE to and follow the steps to help pass HB338

If you live in another state: click HERE to fight Obamacare in your state.


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