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Health Care Compact
Formation date:	2011
Member jurisdictions:	6
Issue(s):	Health Care
Compact website

The Health Care Compact (HCC) is an interstate compact among six states currently - a number that is expected to grow in the near future as more states introduce legislation to join. The compact is designed to transfer the responsibility and authority for regulating health care from the federal government to the member states. An initiative of the Health Care Compact Alliance, a nonpartisan 501(c)(4) organization, the final language of the HCC was published on February 23, 2011. In order for the compact to become law, it must be passed by both houses of each member state's General Assembly, signed by the governor, and approved through Congress. The compact does not need the signature of the president to take effect.

The Health Care Compact has seven primary components:

1. Pledge -- Member states pledge to take action to secure Congressional consent to the compact, and to improve health care policy within their respective jurisdictions.^[1]
2. Legislative power -- The legislature of each member state assumes primary responsibility for the regulation of health care in their respective state.^[1]
3. State control -- Member states are granted the authority to enact health care laws that supersede federal regulations within the state.^[2]
4. Funding -- Member states will receive federal funding appropriated by Congress, based on the federal funds spent in their respective states on health care in 2010.^[2]
5. Interstate Advisory Health Care Commission -- Member states appoint individuals to an advisory commission. The commission is tasked with collecting information relevant to the regulation of health care, and with making recommendations to member states.^[2]
6. Amendments -- Member states can amend the compact by unanimous agreement among themselves without additional Congressional consent.^[3]
7. Withdrawal -- Any member state can withdraw from the compact by adopting a law to that effect. The compact will be dissolved if all but one of the member states withdraws.^[2]

History

The introduction of this legislation came less than a year after the passage of the controversial Patient Protection and Affordable Care Act.^[4] While the HCC does not conflict with efforts to repeal the act, it effectively creates a "regulatory shield" for member states, rendering regulations contained in the Affordable Care Act ineffective in HCC member states. The purpose of the HCC is three-fold: to give member states primary responsibility for health care regulation; to ensure that relevant state laws supersede conflicting federal laws and regulations; and to secure federal funding for states that choose to invoke their authority under the compact.^[5]

On April 20, 2011, Georgia became the first state to adopt the HCC, as Gov. Nathan Deal signed HB 461^[6] into law. Indiana, Oklahoma, Missouri, Texas and Utah have since joined the compact, and similar resolutions have been introduced in several other states.

Timeline of events

2011

• February 23: The Health Care Compact Alliance publishes final language of the Health Care Compact.
• April 20: Georgia becomes the first state to adopt the HCC.^[6]
• April 28: Arizona Gov. Jan Brewer (R) vetoes a bill that would have adopted the HCC.^[7]
• May 12: Montana Gov. Brian Schweitzer (D) vetoes a bill that would have had the state join the HCC.^[8]
• May 18: Oklahoma becomes the second state to adopt the HCC.^[9]
• July 14: Missouri adopts the HCC when Gov. Jay Nixon (D) allows the legislation to become law without his signature.^[10]
• July 18: Texas Gov. Rick Perry (R) signs a measure into law allowing Texas to join the HCC.^[11]

2012

• April 30: Minnesota Gov. Mark Dayton (D) vetoes the HCC.^[12]
• March 20: Indiana Gov. Mitch Daniels (R)^[13] and Utah Gov. Gary Herbert sign measures to allow their states to join the HCC.^[14]

State action

Role of Congress

One of the major legal debates surrounding enactment of the Health Care Compact has to do with the role of Congress and the President. To what extent is Congress necessary to implement the HCC? Is the President's signature needed? Ultimately these issues may have to be resolved in the courts.

Supporters of the compact point to the 10th Amendment of the United States Constitution, which states, "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."

Additionally they reference the Commerce Clause of Article I, section 10, which reads in part, "No State shall, without the Consent of Congress, ... enter into any Agreement or Compact with another State." Under this, they argue, Congress is only required to vote on the measure without ever sending it to the President.^[21]

Some, including the Heritage Foundation, have gone as far to argue that the Commerce Clause does not even apply in this case. Rick Sherwood states, "So long that a state does not restrict commerce in other states, they are not restricted by the commerce clause. Interstate compacts in health insurance markets expand options outside their jurisdiction. In health insurance markets, states are the supreme authority."^[22]

However, Adam Winkler, professor of law at UCLA School of Law argues that the HCC requires the approval of Congress and must be presented to the President for his signature, citing the Presentment Clause of Article I, Section 7. It states in part that "Every Bill" as well as "Every Order, Resolution, or Vote to which the Concurrence of the Senate and House of Representatives may be necessary . . . shall be presented to the President of the United States; and before the Same shall take Effect, shall be approved by him..."^[21]

In his article, however, Winkler leaves out the rest of the sentence, which goes on to say, "being disapproved by him, shall be repassed by two thirds of the Senate and House of Representatives, according to the Rules and Limitations prescribed in the Case of a Bill." Thus, some argue that it is possible that the compact may have to be sent to the President, but could still be passed without his signature.

Another question involving Congress and the HCC is whether the Medicare and Medicaid block-grant provisions of the compact would result in fixed spending amounts for those programs. Supporters of the compact say this is not the case. Jack McHugh, a legislative analyst for The Mackinac Center, states, "No Congress — and no previously approved multi-state compact — can decree how much any future Congress must spend. A sitting Congress can always vote to cut appropriations, and to revise the formulas by which any program’s spending levels are determined."^[23]

Attorneys general challenge the Affordable Care Act

The Health Care Compact is separate from a challenge the state attorneys general are bringing through the court system.

Following its passage on Christmas Eve in 2009, fifteen state attorneys general questioned the constitutionality of a specific controversial provision within the Senate version of the bill, and began exploring potential legal challenges to the measure as well. The stipulation in question was the back room deal Senate Majority Leader Harry Reid struck with Nebraska Senator Ben Nelson to recruit him as the 60th vote needed to pass the measure, an arrangement "dubbed the "Nebraska Compromise" or the "Cornhusker Kickback" by Republican critics." The agreement gave Nebraska exemption from its share of the Medicaid expansion, "a carve out that is expected to cost the federal government $100 million over 10 years."^[24]

In April 2010, 13 state attorneys general filed a lawsuit in Florida seeking to repeal the law and by June at least 20 states supported the challenge. The case centered on the mandate that most Americans would have to purchase insurance starting in 2014. On September 28, 2011, both sides petitioned the U.S. Supreme Court to take up the case during its next term.^[25]

On March 26-28, 2012, the Court heard lawsuits challenging the law filed by 26 states and the National Federation of Independent Business.^[26]

Support

Supporters

The Health Care Compact Alliance is the main sponsor of the Health Care Compact. The Alliance is headed by Chairman Eric O'Keefe, a private investor from Wisconsin, and Vice Chairman Leo Linbeck III, president and CEO of Aquinas Companies, LLC.^[27] The alliance is working to introduce the HCC in state legislatures across the country.

Organizations

Other organizations who support the health care compact include:

• the Tea Party Patriots
• the Texas chapter of Americans for Prosperity,^[28]
• The Heritage Foundation ^[22]
• The Alliance for Self-Government^[29]

Individuals

Individuals have also voiced their support for the health care compact initiative:

• Lee Habeeb, Vice President of Content at Salem Radio Network
• Nick Dranias, Goldwater Institute
• The Honorable Thomas C. Feeney, a former member of the United States House of Representatives from Florida and a former Speaker of the Florida House of Representatives^[22]
• Fred Barnes, a columnist in the Weekly Standard

Arguments in favor

Some of the arguments that have been made for the adoption of the Health Care Compact include:

• Healthcare is too complex to manage at the federal level.^[47]
• States will be more efficient in the regulation and oversight of their health care systems than the federal government.^[47]
• A health care compact would not mandate its member states to implement one particular health care system; the states would be free to choose the system that works best in their jurisdiction.^[48]
• This increased flexibility given to states will drive health care reform^[48] and "stimulate greater competition in the insurance markets."^[49]
• The health care compact will end states' dependence on federal funding support for programs like Medicare and Medicaid.^[50]

Opposition

Opponents

A single, national group standing in opposition to the Health Care Compact has yet to emerge, but there are several statewide organizations working to prevent HCC legislation from passing in their respective legislatures.

Organizations

• On May 10, 2011, Bob Semro of the Bell Policy Center offered testimony to the Colorado State Senate Local Government Committee opposing House Bill 11-1273.^[51]

• The Tennessee Health Care Campaign published a list of talking points on their website for voters to use when talking to their state representatives, and identified the Health Care Compact as one if its' state legislative focus areas.

• Community Catalyst, a non-profit advocacy organization, said, "Compacts are a threat to the Affordable Care Act and to the expanded access to quality, affordable care that it is already providing to many Americans. Compacts may also threaten other federal health programs. They are likely to perpetuate the extreme differences from state-to-state that currently exist in access to quality, affordable health care."^[52]

Individuals

Arizona

• Gov. Jan Brewer (R) vetoed Senate Bill 1088 which would have joined the HCC. She said she believed the compact would violate constitutional separation of powers.^[7]

Montana

• Gov. Brian Schweitzer (D)^[46]

New Hampshire

• State Rep. Gary Richardson (D)^[53]
• 2012 Governor candidate Maggie Hassan (D)^[54]
• 2012 Governor candidate Jackie Cilley (D)^[54]

Utah

• State Sen. Patricia Jones (D)^[55]

Arguments against

Arguments made by opponents of the Health Care Compact include:

• The compact is about politics rather than health care, and "only provides an ideological statement about government reform. ... [It presents] no detail or direction on how to improve health care.^[56]
• The compact only serves to reinforce the unequal, state-by-state access to quality and affordable health care.^[57]
• Current Medicare recipients' health care services could be in jeopardy.^[57]

Governance

The compact created the Interstate Advisory Health Care Commission to oversee administration of the compact. The commission is comprised of members appointed by each member state. Each state is responsible for determining the exact process by which its commissioners (no more than 2 per state) are chosen.

The commission is granted specific powers to:

• study the issues of Health Care regulation of particular concern to the Member States
• make non-binding recommendations to the Member States
• collect information and data to assist the Member States in their regulation of Health Care, including, but not limited to, assessing the performance of various state Health Care programs and compiling information on the cost of Health Care. The Commission shall then make this information available to the legislatures of the Member States
• elect from among its membership a Chairman
• adopt and publish bylaws and policies which are not inconsistent with the compact
• meet at least once a year, and may meet more frequently, as its bylaws direct

Text of the compact

The legislature of each member state passes the laws with certain and modifications, but the core of the legislation remains the same.

Whereas, the separation of powers, both between the branches of the federal government and between federal and state authority, is essential to the preservation of individual liberty; Whereas, the Constitution creates a federal government of limited and enumerated powers, and reserves to the States or to the people those powers not granted to the federal government; Whereas, the federal government has enacted many laws that have preempted state laws with respect to Health Care, even though Health Care regulation is properly the authority and responsibility of the States; Whereas, the Member States seek to increase individual liberty and control over personal Health Care decisions, and believe the best method to secure that control is by vesting regulatory authority over Health Care in the States; Whereas, by acting in concert, the Member States may express and inspire confidence in the ability of each Member State to effectively govern Health Care; and Whereas, the Member States recognize that consent of Congress may be more easily secured if the Member States collectively seek consent through an interstate compact; NOW THEREFORE, the Member States hereto resolve, and by the adoption into law under their respective state constitutions of the present Health Care Compact, agree, as follows: Section 1: Definitions For purposes of this Compact: Member State shall refer to a state that is signatory to this Compact and has adopted it under the laws of that state. Effective Date shall refer to the date upon which this Compact shall become effective for purposes of the operation of state and federal law in a Member State, which shall be the latter of: a) the date upon which this Compact shall be adopted under the laws of the Member State, b) the date upon which this Compact receives the consent of Congress pursuant to Article I, Section 10, of the Constitution, such consent itself requiring this Compact to have been adopted by at least two Member States. Health Care shall refer to all healthcare goods and services that fall under the definition of “Health Care” in Title 45, Part 160, Section 103 of the Code of Federal Regulations, except those provided by the Department of Defense and Veterans Administration. Commission shall refer to the Interstate Advisory Health Care Commission. Section 2: Pledge All Member States pledge themselves to take joint and separate action to secure the consent of Congress to this Compact in order to return the authority to regulate Health Care to the Member States, consistent with the goals and principles articulated herein. All Member States further pledge themselves to improve Health Care policy within their respective jurisdictions and according to the judgment and discretion of each Member State. Section 3: Legislative Power The legislatures of the Member States have the primary responsibility to regulate Health Care in their respective states. Section 4: State Control By consenting to this Compact, Congress agrees that each Member State shall have the authority to enact state laws that supersede any federal regulations within the state in the area of Health Care. Federal law will remain in effect unless a Member State expressly invokes its authority under this Compact. Section 5: Funding Each Member State shall have the right to federal funds, appropriated by Congress pursuant to the formula described in Attachment A, to support the exercise of Member State authority under this Compact. Section 6: Interstate Advisory Health Care Commission The Member States hereby create the Interstate Advisory Health Care Commission. (a) The Commission may study the issues of Health Care regulation of particular concern to the Member States. After careful consideration, the Commission may make non-binding recommendations to the Member States. The legislatures of the Member States may then consider these recommendations in determining the appropriate Health Care policy in their respective states. (b) The Commission shall collect information and data to assist the Member States in their regulation of Health Care, including, but not limited to, assessing the performance of various state Health Care programs and compiling information on the cost of Health Care. The Commission shall then make this information available to the legislatures of the Member States. (c) The Commission shall consist of members appointed by each Member State through a process to be determined by the laws of each Member State. No state may appoint more than two members to the Commission, and at any time a Member State may withdraw its members from the Commission. Each member of the Commission shall be entitled to one vote. The Commission shall not act unless a majority of the members are present, and no action shall be binding unless approved by a majority of the total number of members. (d) The Commission may elect from among its membership a Chairman. The Commission may adopt and publish bylaws and policies which are not inconsistent with this Compact. The Commission will meet at least once a year, and may meet more frequently, as its bylaws direct. (e) The Commission shall be funded by the Member States as the Member States may agree. The Commission shall have all the responsibilities and duties set forth herein, and such additional responsibilities and duties as may be conferred upon it by subsequent action of the respective legislatures of the compacting states in accordance with the terms of this Compact. Section 7: Congressional Consent This Compact shall be effective upon its adoption by the Member States and consent of Congress. This Compact shall not be effective unless Congress, in consenting to this Compact, does not alter the fundamental purposes of this Compact: (a) To secure the right of the Member States to regulate Health Care in their respective states and to supersede any conflicting federal law within their states; and (b) To secure federal funding for Member States that choose to invoke their authority under this Compact, pursuant to the formula described in Attachment A. Section 8: Amendments This Compact may be amended by agreement among the Member States and adoption of such agreement into the laws of the Member States. By consenting to this Compact, Congress also consents to any amendments that directly or indirectly impact the regulation of Health Care in the Member States. For all other amendments, further consent of Congress is expressly required. Variations in Attachment A between Member States will not prevent this Compact from becoming an effective and operation agreement between the states. Section 9: Withdrawal; Dissolution Any Member State may withdraw from this Compact by adopting a law to that effect. This Compact shall be dissolved upon the withdrawal of all but one of the Member States.

See also

• Interstate compact

External links

• Official Health Care Compact website
• Health Care Compact's Facebook page
• Health Care Compact on Twitter
• Physicians for the Health Care Compact (run by Health Care Compact Alliance)
• Democrats for the Health Care Compact (run by Health Care Compact Alliance)
• Republicans for the Health Care Compact (run by Health Care Compact Alliance)

References

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