Funny thing about the law, every once in a while it has a way of showing up in the oddest places—usually a courtroom—and really throws a monkeywrench into the great works of public policy that come from state and local governments. The City of Oakland decided to do something about “predatory lending” a few years ago, that is, until the courts decided that their efforts were preempted by state law. When the California legislature decided to regulate privacy practices of financial institutions, the federal courts decided that they had gone a bit too far. Then there was the one about the City of San Francisco deciding to regulate ATM fees. That didn’t last long, either. Undaunted, the City of San Francisco recently enacted its own version of health care reform. That effort is pending in the courts.
Annapolis, Maryland is a beautiful colonial town on the shores of the Chesapeake. The state capitol building briefly served as our nation’s capitol, and its old buildings are steeped in tradition and lore. And like the places our California lawmakers inhabit, it holds a lesson or two for us, too.
A few years ago, the Maryland legislature decided to enact comprehensive health care reform. Confident that it would pass federal scrutiny, the legislature passed its reforms and the governor signed them. A few seconds after the ink dried, the whole matter was tossed into federal court.
Wal-Mart became the poster child for the litigation because many thought the “pay or play” provisions were targeted specifically at it. “Not so!” said the Maryland attorney general. The District Court judge begged to differ and decided that because the legislation really targeted regulating benefit plans, it ran afoul of the Employee Retirement Income Security Act (ERISA), which just happens to be a 30-plus-year-old federal law preempting state laws regulating employer-sponsored benefit plans.
Well, the health care reform community, and apparently the State of Maryland, were outraged at the dubious scholarship the judge used in deciding to strike down that law, so off they went to the United States Court of Appeals for the Fourth Circuit. Earlier this month, two of the three judges on the panel that heard Maryland’s case agreed with the District Court and upheld invalidating the Maryland law. Whether this goes further remains to be seen.
Commentators in Sacramento already have seized upon this as a potential stumbling block in the governor’s effort to enact reforms here in California. “Not so!” say the governor’s experts. Policymakers in Sacramento are certain their efforts will pass scrutiny and, if true to form, likely will complain mightily about any entity that has the temerity to suggest otherwise to a federal court.
No doubt the so-called “experts” advised the same thing in Annapolis, San Francisco and probably Boston, too.
Health care reform, contrary to the assertion of some, is not the same as workers’ compensation reform. Washington, D.C. is more than happy to let the states decide what they want to do for workers injured on the job. The jumbled mess of failed experiments that is workers’ compensation among the 49 states that mandate it (it’s optional in Texas) is a testimony to that. But when policymakers want to fundamentally change the way employers provide health care benefits to employees, Congress steps in, and steps in big.
No news conference needs to be cancelled, and no bipartisan effort to craft sweeping legislation needs to be put on hold, because of ERISA or recent cases interpreting it. These are just words and pieces of paper. What gets put on hold is results. There is no question that health care in the United States needs to be reformed. The people who need to do the reforming should do so. Unfortunately, it likely will take a federal court to remind us that those people aren’t in Sacramento.