Federal vs State Health Care Dispute Tests Constitution

Written by Warren Mass on January 15 2010.

In contrast to the (relatively) pro-state position taken by the commissioners, the author also quoted from Rep. John Garamendi (D-Calif., pictured at left), former California Insurance Commissioner and a proponent of a strong federal role in regulating any new health care program. Which is not unexpected, since the federal government always regulates what it funds.

"You start with a strong federal regulatory environment, one that has the rules clearly written and one that has a mechanism to enforce those rules," said Garamendi.

A news release posted on Garamendi’s House website, entitled “Leaders Warn Premium Hikes, Health Insurers’ Abusive Practices Could Continue Without Stronger Regulation,” quotes the congressman’s following statement:

"As a former insurance commissioner, I know firsthand that health insurance can burden people with unaffordable coverage unless we demand accountability from insurance companies," said Garamendi, California’s first elected insurance commissioner and former chair of the California Senate Health Committee. "As we merge the House and Senate health care bills, we must not leave consumers and small businesses unprotected from insurance company greed. The House bill creates a national exchange that will give consumers an opportunity to get health insurance at a lower cost with expanded benefits, and it will provide more oversight. This is superior to the Senate bill, which expects all states — regardless of size, wherewithal, or existing insurance infrastructure – to manage new marketplaces in smaller state exchanges."

The statement posted by Garamendi notes some distinct differences between the House and Senate health care plans, worded in language obviously biased in favor of the House version:

  • “The House bill includes a federal health insurance marketplace rather than weaker state insurance exchanges.”
  • “The federal exchange contained in the House bill would ensure immediate implementation and provide a national watchdog to unite fragmented markets and subject them to uniform accountability regulations.”
  • “The Senate’s plan to give states responsibility for creating and monitoring exchanges could allow insurers to game local systems and undermine implementation of health reform from the start.”

The statement also quotes Karen Pollitz, a Georgetown University “health policy expert,” who said:

Accountability provisions under the Senate bill aren’t strong enough. The federal government simply must step up and play a strong, proactive, pro-patient role in health insurance regulation. In addition, there needs to be a national exchange – both to reinforce new market regulations and to ensure that all consumers get reliable, accurate, and accessible information to compare plans. Especially with so many states facing fiscal and economic crisis, they just don’t have the resources to rigorously and flexibly manage exchanges. (Emphasis added.)

But the obvious bias in favor of the House plan by Garamendi and his allies in the House and academia should not lead the observer to conclude that the Senate plan must be — by virtue of being attacked by the more blatant proponents of federal regulatory power — a model of constitutionality and free market economics.

If it were simply a matter of who should regulate the insurance industry, the federal government or the states, the answer could be established by a simple reading of the Tenth Amendment:

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

Since, in Section 8, the area of the Constitution where powers are delegated to Congress, there is no mention of any power to establish, provide, or regulate health care, this power is reserved to the states or private citizens by default.

And while the Senate plan may be less intrusive than the House plan, because it gives states responsibility for creating and monitoring exchanges related to “health reform,” it is important to keep in mind that before the federal government can “give” responsibility to the states, it must first usurp that responsibility. Health care, by not being mentioned anywhere in the Constitution (just as health, education, agriculture, and numerous other “human services” are not mentioned) is simply not among the powers delegated to Washington. The federal government constitutionally cannot share power it does not rightfully possess in the first place.

So the argument between those who favor the Senate plan and those who favor the House plan is pointless.

Both plans should be rejected.


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