NCPA - National Center for Policy Analysis


December 15, 2008

In 2006, San Francisco passed a law that required most employers within the county to provide health insurance to their workers or pay into a government fund set aside for public health care.  In September 2008, the Ninth Circuit ruled that the law did not violate the Employee Retirement Income Security Act (ERISA), a 1974 federal law preempting state legislation from governing private employer-based health plans, opening up 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, says Grace-Marie Turner, president of the Galen Institute.

Consider the example of Massachusetts:

  • The state 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.
  • In 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 3 years to help the state fund its $21 billion health "reform" plan.

While the federal government would have been funding part of the state'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, says Turner.

Source: Grace-Marie Turner, "Massachusetts, San Francisco Expand Government's Reach," Health Care News (Heartland Institute), December 2008.


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