MD's corporate health coverage bill struck down

Cross posted from DMIblog   (and by Amy Traub)
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This isn't the kind of coincidence I'm fond of. Yesterday, just as the Drum Major Institute finished putting the final touches on the transcript of our most recent Marketplace of Ideas event, making it (as well as audio and video of the event) available to the world, along comes the U.S. District Court and overturns the very legislation we are hailing as a progressive advance.

At issue is Maryland's Fair Share for Health Care Law, requiring the state's largest employers (those with more than 10,000 employees) to pay at least the state's average percentage of payroll costs toward employee health care or pay an equivalent amount into a state health care fund. I've argued that this legislation is primarily about holding large profitable employers accountable to their employees and for the costs they impose on public health care systems by failing to provide insurance. Members of our panel and audience argued that the legislation was also a step toward acheiving universal health care.

All of our arguments, however, may be trumped by the argument of the Retail Industry Leaders Association, representative of the state's big employers, including Wal-Mart, which convinced the Court that states have no jurisdiction to impose health care mandates on companies with employees in more than one state.

The lawyer for the retailers was none other than Eugene Scalia, son of the Supreme Court Justice, who insisted that "attempts to address the [health care] problem are going to require a federal response, not a patchwork of state and local mandates."

The problem, of course, is that there is no effective federal response to our health care crisis in the wings --  I am a fan of Rep. John Conyers' U.S. National Health Insurance Act, but it's not making much progress in Congress. In the meantime, the buck has been passed to states and localities and now their options have been reduced, with disappointing implications both for localities that have already passed Fair Share-style laws and states, like New York, that are contemplating them.

The State of Maryland plans to appeal.

Tags: District Judge Frederick Motz, ERISA, fair share, Fair Share Act (MD), Giant Food, Healthcare, Maryland, Maryland Fair Share Health Care Fund Act, Retail Industry Leaders Association v Fielder, Wal-Mart (all tags)

Comments

5 Comments

Not a Defeat

We shouldn't interpret this as a defeat. It's just a setback and it may not even survive an appeal.

by Left in the West 2006-07-20 09:29AM | 0 recs
Re: MD's corporate health coverage bill struck dow

Thanks for the stateside info Matt! I feel less ill already.

Def keep us posted about what you hear coming out of the local level.

by DMIer 2006-07-20 10:40AM | 0 recs
Judge's opinion pretty devasting against the act

The way I read it, Judge Motz thinks he's been deprived of good golfing time by a thoroughly fatuous piece of political hackery.

Having got past the standing questions (to p18), we find the good judge thinks that it's pretty much a slam dunk that the MD shenanigan is preempted by ERISA.

(I'm no expert in the field, and perhaps the judge is talking out of his ass. But, reading just his opinion, I'm convinced.)

The key point is on p20: when he talks about long established Supreme Court law, says that controls his decision (ie, game over); but then, just for the hell of it, goes on comprehensively to piss on the case that different SCOTUS cases could affect the issue.

In other words, he's saying that any lawyer with decent vision and a Lexis account could have found out PDQ that the MD law was, legally, not worth the paper it was written on.

Put another way, the whole thing was a stunt.

He notes (p3) that Wal-Mart rival, Giant Food, had lobbied for the law.

And (p26) that the sum that Wal-Mart would be liable for would be an insignificant fraction of MD's Medicaid budget.

Why, the question is, target just the one company?

The judge says (note on p23) that he is not preempting the ERISA status of the MA healthcare plan on the basis that

In light of what is generally perceived as a national health care crisis,it would seem that to the extent ERISA allows, it is strongly in the public interest to permit states to perform their traditional role of serving as laboratories for experiment in controlling the costs and increasing the quality of health care for all citizens.

Does that mean that the guys in MA fully explored the ERISA problem and found a way round it? Let's hope so.

Overall - and, as I say, just reading the judge's opinion, I get the impression that the MD law was a stunt of the Schiavo Act kind which all wised-up observers would have known was vulnerable to ERISA challenges, but the law was nevertheless thought worthwhile as another poke up the ass for Big Bad Wolf Wal-Mart.

Perhaps that's wrong. I'd be interested to see evidence to the contrary.

by skeptic06 2006-07-20 10:44AM | 0 recs
Re: Judge's opinion pretty devasting against the a

I am shocked, shocked, to discover that there might be politicians who would pass legislation that had no chance of remaining law, simply to score points with a segment of the voters.

Why, before you know it, there will be legislators who take money in exchange for passing laws which benefit only those who give money to the lawmakers.

(Yeah, I'm feeling double-espresso cynical today. Don't mind me.)

The last time I read a judge's decision was the Intelligent Design verdict (Dover, PA) and it was better than a lot of novels I've read. It can be very worthwhile.

Nice comment, skeptic. Have a 3 on me.

by KB 2006-07-21 06:14AM | 0 recs
Re: MD's corporate health coverage bill struck dow

I'm not a lawyer so I can't respond to the legality  but in terms of the bill's intentions...

the Maryland bill was actually written to cover large employers - companies with 10,000 employees or more. And of the companies in MD with that many employees only Wal-Mart wasn't paying up on its responsibility to provide medical care.

You could still say the bill was written just to bash wal-mart but if you make the bill apply to smaller employers the employers will plead poverty and some of them might be right  (that's why employers and employees should be uniting to demand healthcare not be employer based).

Sure it's in Giant Food, a union grocery store's interest to make Wal-Mart pay up and play fair. But its also in everyone's interest. The bill was a way to leverage business's self interest to make businesses come down on the right side of an issue for a change. It puts the pressure on businesses to demand that the government step in a fix the broken healthcare system.

by DMIer 2006-07-21 07:06AM | 0 recs

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