Massachusetts, San Francisco Expand Government’s Reach

Published December 1, 2008

Massachusetts has won another round in its ongoing effort to force taxpayers across the country to help fund its experiment in so-called universal health coverage.

On the last day of September, Gov. Deval Patrick (D) announced the federal government had approved the extension of a waiver allowing the state to continue to provide Medicaid subsidies to people making as much as $63,600 a year, or 300 percent of the federal poverty level.

As a result, taxpayers across the nation will pay nearly $11 billion over the next three years to help the Bay State fund its $21 billion health “reform” plan.

Patrick has been boasting 439,000 more people in the Bay State have health insurance since the reform law was passed in 2006. What he doesn’t say is at least 56 percent are getting free or heavily subsidized coverage, funded by the state’s taxpayers and federal matching Medicaid dollars.

Taxpayers Forced to Participate

The jury is still out on how the state will juggle growing opposition to the individual mandate and soaring health costs, but U.S. taxpayers will apparently be forced to continue funding the plan while legislators debate whether it is working at all.

While the federal government would have been funding part of Massachusetts’s Medicaid program in any case, the big, open question is how the government can now deny similar requests from other states that want to follow suit and also increase Medicaid eligibility to 300 percent of the poverty level.

Before that happens, it might be wise to have a national debate on whether Medicaid should be the vehicle to expand taxpayer-funded health coverage to millions more middle-income Americans.

San Francisco  Plan Upheld

The Ninth Circuit Court of Appeals, already notorious for having the highest reversal rate by the U.S. Supreme Court of any federal appeals court in the nation, is poised for another test after ruling San Francisco’s play-or-pay mandate for employers is legal.

San Francisco passed a law in 2006 that requires most employers within the county to provide health insurance to their workers or pay into a government fund set aside for public health care. The Ninth Circuit ruled on September 30 the law does not violate the Employee Retirement Income Security Act (ERISA), a 1974 federal law preempting state legislation from governing private employer-based health plans.

Opening the Floodgates

“This decision opens the floodgates to every state and locality seeking to develop its own version of health reform, creating an impossible environment for major employers—and the millions of American workers who value their employer-sponsored health plans,” said James A. Klein, president of the American Benefits Council, in a statement.

Maryland passed legislation in 2006 that would have required all employers with more than 10,000 workers in the state to pay at least 8 percent of their payroll for health insurance. The Fourth Circuit Court of Appeals ruled the law a violation of ERISA.

Clearly, justices of the U.S. Supreme Court will have to resolve this. And they might take a look at Massachusetts’s play-or-pay mandate while they are at it.

Grace-Marie Turner ([email protected]) is president of the Galen Institute.