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A little help, please

Congress must either amend a benefits law so states can fix healthcare, or solve the mess itself.

January 11, 2008

Many unanswered questions remain about the universal healthcare plan supported by Gov. Arnold Schwarzenegger and Assembly Speaker Fabian Nunez (D-Los Angeles). Among the most vexing is whether its requirement that businesses chip in to help cover the uninsured violates the Employee Retirement Income Security Act.

On Wednesday, a three-judge panel of the U.S. 9th Circuit Court of Appeals, ruling on a San Francisco statute, bolstered arguments that the plan does not violate this federal law, which preempts state efforts to regulate employee benefits. Proponents of the plan took heart. But if Schwarzenegger and Nunez are really serious about championing healthcare reform in California -- indeed, if policymakers across the country want states to become laboratories for reform -- they must pressure Congress to amend the law.

The Employee Retirement Income Security Act was written in 1974 to protect employee benefits -- primarily pensions, but also healthcare. It includes a preemption clause that stipulates the act should "supersede any and all state laws" that "relate to any employee benefit plan."

The problem ever since, in court case after court case, has been divining what "relate to" means. Some courts, including the 4th Circuit Court of Appeals, have interpreted the language broadly. Others, like the 9th Circuit panel, have concluded that some business mandates don't merit preemption. The 9th Circuit may stick to its reasoning when it makes a final ruling on the San Francisco appeal. Or it may not. The Supreme Court may take it up. Or it may not. Whatever happens, California's healthcare plan is likely to face legal challenges from business if it moves forward -- unless Congress clarifies the act's preemption clause.

A handful of House members, including Reps. Robert E. Andrews (D-N.J.), Tammy Baldwin (D-Wis.), Tom Price (R-Ga.), John F. Tierney (D-Mass.) and Bob Beauprez (R-Colo.), have started a new discussion of this law. For many in Congress, the prospect of change is politically unpalatable -- large businesses don't want to face a patchwork of benefits provisions and have lobbied for the status quo. But is amending the act as unpalatable as figuring out how to fix the country's healthcare system? If states want to try it, Congress should make it possible for them to do so. If it won't, it must get serious about drafting its own solutions.

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