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Health Care Compact

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Health Care Compact
Health care compact logo.jpg
Formation date: 2011
Member jurisdictions: 9
Issue(s): Healthcare
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The Health Care Compact (HCC) is an interstate compact among nine states—a number that is expected to grow in the near future as more states introduce legislation to join. The nine member states are Alabama, Georgia, Indiana, Kansas, Missouri, Oklahoma, South Carolina, Texas and Utah. The compact is designed to transfer the responsibility and authority for regulating healthcare 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 healthcare policy within their respective jurisdictions.[1]
  2. Legislative power — The legislature of each member state assumes primary responsibility for the regulation of healthcare in their respective state.[1]
  3. State control — Member states are granted the authority to enact healthcare laws that supersede federal regulations within the state.[1]
  4. Funding — Member states will receive federal funding appropriated by Congress, based on the federal funds spent in their respective states on healthcare in 2010.[1]
  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 healthcare, and with making recommendations to member states.[1]
  6. Amendments — Member states can amend the compact by unanimous agreement among themselves without additional congressional consent.[1]
  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.[1]

History

The introduction of this legislation came less than a year after the passage of the controversial Patient Protection and Affordable Care Act.[2] 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 healthcare 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.[1]

Nine states have already enacted compact legislation.

On April 20, 2011, Georgia became the first state to adopt the HCC, as Gov. Nathan Deal signed HB 461 into law. Alabama Indiana, Kansas, Oklahoma, Missouri, Texas, Utah and South Carolina have since joined the compact, and similar resolutions have been introduced in several other states.[3][4]

Role of Congress

See also: Congressional consent

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.[5]

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..."[5]

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."[6]

On May 12, 2015, Rep. Doug Collins (R-Ga.) introduced a bill in the U.S. House to grant consent of Congress to the Health Care Compact.[7]

Attorneys general challenge the Affordable Care Act

The Health Care Compact is separate from a challenge the state attorneys general brought 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."[8]

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.[9]

On June 28, 2012, the Supreme Court ruled 5-4 to uphold the Affordable Care Act, with Chief Justice Roberts providing the deciding vote.[10] The landmark decision was hailed as a partial victory by both ends of the political spectrum. Those who defended the President's healthcare overhaul felt the ruling vindicated the President and the law against accusations of unconstitutionality; those who opposed the law, including the 26 attorneys general who instigated the legal challenge, felt likewise redeemed insofar as two key provisos were determined by the Supreme Court as unnecessary to the overall preservation of the law.[11] For one, the court ruled to limit the federal government's authority to require states to participate in the coming Medicaid expansion. Second, the individual mandate failed to stand up to constitutional vetting vis a vis the Commerce Clause, and therefore would survive in the form of a tax. The latter proviso struck at the heart of the lawsuit, and guided Florida attorney general Pam Bondi's official statement on the ruling. “All of us who are disappointed with the ultimate outcome today cannot lose sight of what we accomplished. We fought for the principle that the Constitution limits Congress’s power to direct the lives of our people, and on that point, we won," she said.[12] Bondi served on behalf of Florida as lead plaintiff in the case.

Support

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

  • Healthcare is too complex to manage at the federal level.[13]
  • States will be more efficient in the regulation and oversight of their healthcare systems than the federal government.[13]
  • A healthcare compact would not mandate its member states to implement one particular healthcare system; the states would be free to choose the system that works best in their jurisdiction.[14]
  • This increased flexibility given to states will drive healthcare reform[14] and "stimulate greater competition in the insurance markets."[15]
  • The healthcare compact will end states' dependence on federal funding support for programs like Medicare and Medicaid.[16]

Opposition

Arguments made by opponents of the Health Care Compact include the following:

  • The compact is about politics rather than healthcare, and "only provides an ideological statement about government reform. ... [It presents] no detail or direction on how to improve healthcare.[17]
  • The compact only serves to reinforce the unequal, state-by-state access to quality and affordable healthcare.[18]
  • Current Medicare recipients' healthcare services could be in jeopardy.[18]

Governance

The compact created the Interstate Advisory Health Care Commission to oversee administration of the compact. The commission is composed of members appointed by each member state. Each state is responsible for determining the exact process by which its commissioners (no more than two per state) are chosen.[19]

The commission is granted specific powers to do the following:

  • 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[19]

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, and placed increasing strain on State budgets, impairing other responsibilities such as education, infrastructure, and public safety;

Whereas, the Member States seek to protect individual liberty and personal control over Health Care decisions, and believe the best method to achieve these ends 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 govern Health Care effectively; and

Whereas, the Member States recognize that consent of Congress may be more easily 16 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

As used in this Compact, unless the context clearly indicates otherwise:

  • Commission means the Interstate Advisory Health Care Commission.
  • Effective Date means 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 later of:
  • a) the date upon which this Compact shall be adopted under the laws of the Member State, and
  • b) the date upon which this Compact receives the consent of Congress pursuant to Article I, Section 10, of the United States Constitution, after at least two Member States adopt this Compact.
  • Health Care means care, services, supplies, or plans related to the health of an individual and includes but is not limited to:
  • a) preventive, diagnostic, therapeutic, rehabilitative, maintenance, or palliative care and counseling, service, assessment, or procedure with respect to the physical or mental condition or functional status of an individual or that affects the structure or function of the body, and
  • b) sale or dispensing of a drug, device, equipment, or other item in accordance with a prescription, and
  • c) an individual or group plan that provides, or pays the cost of, care, services, or supplies related to the health of an individual, except any care, services, supplies, or plans provided by the United States Department of Defense and United States Department of Veteran Affairs, or provided to Native Americans
  • Member State means a State that is signatory to this Compact and has adopted it under the laws of that State.
  • Member State Base Funding Level means a number equal to the total Federal spending on Health Care in the Member State during Federal fiscal year 2010. On or before the Effective Date, each Member State shall determine the Member State Base Funding Level for its State, and that number shall be binding upon that Member State. The preliminary estimate of Member State Base Funding Level for the State of [STATE NAME] is [ESTIMATE FROM TABLE].
  • Current Year Inflation Adjustment Factor means the Total Gross Domestic Product Deflator in the current year divided by the Total Gross Domestic Product Deflator in Federal fiscal year 2010. Total Gross Domestic Product Deflator shall be determined by the Bureau of Economic Analysis of the United States Department of Commerce.

Section 2: Pledge The Member States shall take joint and separate action to secure the consent of the United States 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 in this Compact. The Member States shall improve Health Care policy within their respective jurisdictions and according to the judgment and discretion of each Member States.

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 Each Member State, within its State, may suspend by legislation the operation of all federal laws, rules, regulations, and orders regarding Health Care that are inconsistent with the laws and regulations adopted by the Member State pursuant to this Compact. Federal and State laws, rules, regulations, and orders regarding Health Care will remain in effect unless a Member State expressly suspends them pursuant to its authority under this Compact. For any federal law, rule, regulation, or order that remains in effect in a Member State after the Effective Date, that Member State shall be responsible for the associated funding obligations in its State.

Section 5: Funding

  • (a) Each Federal fiscal year, each Member State shall have the right to Federal monies up to an amount equal to its Member State Current Year Funding Level for that Federal fiscal year, funded by Congress as mandatory spending and not subject to annual appropriation, to support the exercise of Member State authority under this Compact. This funding shall not be conditional on any action of or regulation, policy, law, or rule being adopted by the Member State.
  • (b) By the start of each Federal fiscal year, Congress shall establish an initial Member State Current Year Funding Level for each Member State, based upon reasonable estimates. The final Member State Current Year Funding Level shall be calculated, and funding shall be reconciled by the United States Congress based upon information provided by each Member State and audited by the United States Government Accountability Office.

Section 6: Interstate Advisory Health Care Commission

  • (a) The Interstate Advisory Health Care Commission is established. The Commission consists of members appointed by each Member State through a process to be determined by each Member State. A Member State may not appoint more than two members to the Commission and may withdraw membership from the Commission at any time. Each Commission member is 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 Commission’s total membership.
  • (b) The Commission may elect from among its membership a Chairperson. The Commission may adopt and publish bylaws and policies that are not inconsistent with this Compact. The Commission shall meet at least once a year, and may meet more frequently.
  • (c) The Commission may study issues of Health Care regulation that are of particular concern to the Member States. The Commission may make non-binding recommendations to the Member States. The legislatures of the Member States may consider these recommendations in determining the appropriate Health Care policies in their respective States.
  • (d) The Commission shall collect information and data to assist the Member States in their regulation of Health Care, including assessing the performance of various State Health Care programs and compiling information on the prices of Health Care. The Commission shall make this information and data available to the legislatures of the Member States. Notwithstanding any other provision in this Compact, no Member State shall disclose to the Commission the health information of any individual, nor shall the Commission disclose the health information of any individual.
  • (e) The Commission shall be funded by the Member States as agreed to by the Member States. The Commission shall have the responsibilities and duties as may be conferred upon it by subsequent action of the respective legislatures of the Member States in accordance with the terms of this Compact.
  • (f) The Commission shall not take any action within a Member State that contravenes any State law of that Member State.

Section 7: Congressional Consent This Compact shall be effective on its adoption by at least two Member States and consent of the United States Congress. This Compact shall be effective unless the United States Congress, in consenting to this Compact, alters the fundamental purposes of this Compact, which are:

  • (a) To secure the right of the Member States to regulate Health Care in their respective States pursuant to this Compact and to suspend the operation of any conflicting federal laws, rules, regulations, and orders within their States; and
  • (b) To secure Federal funding for Member States that choose to invoke their authority under this Compact, as prescribed by Section 5 above.

Section 8: Amendments The Member States, by unanimous agreement, may amend this Compact from time to time without the prior consent or approval of Congress and any amendment shall be effective unless, within one year, the Congress disapproves that amendment. Any State may join this Compact after the date on which Congress consents to the Compact by adoption into law under its State Constitution.

Section 9: Withdrawal; Dissolution Any Member State may withdraw from this Compact by adopting a law to that effect, but no such withdrawal shall take effect until six months after the Governor of the withdrawing Member State has given notice of the withdrawal to the other Member States. A withdrawing State shall be liable for any obligations that it may have incurred prior to the date on which its withdrawal becomes effective. This Compact shall be dissolved upon the withdrawal of all but one of the Member States.

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Footnotes

  1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 Health Care Compact.org, "The Health Care Compact (2)," May 5, 2011
  2. ↑ Health Care.gov, "Understanding the Affordable Care Act," May 5, 2011
  3. ↑ VoteSmart.org, "Georgia HB461," accessed March 12, 2016
  4. ↑ Governing Magazine, " 9 States Sign Compact to Run Health Care without Congress," August 28, 2014
  5. ↑ 5.0 5.1 ACS, "Republicans’ Latest Effort to Circumvent the Constitution: Interstate Compacts," March 10, 2011
  6. ↑ Free Republic, "Health Care Compact Bill Would Shift Power Back To The States," March 6, 2012
  7. ↑ Congress.gov, "H.J.Res.50 - Granting the consent of Congress to the Health Care Compact.," accessed July 21, 2015
  8. ↑ Politico, "GOP AGs may sue over health bill" 24 Dec. 2009
  9. ↑ National Conference of State Legislatures, "State Legislation and Actions Challenging Certain Health Reforms, 2011-2012," accessed April 28, 2012
  10. ↑ The Miami New Times, "Obamacare Ruled Constitutional by Supreme Court; Sorry, Pam Bondi," June 28, 2012
  11. ↑ The National Law Journal, "Healthcare ruling: the professional judgments," July 2, 2012
  12. ↑ My Florida Legal-Office of the Attorney General, "Attorney General Pam Bondi's Statement on the Supreme Court's Decision in the Healthcare Lawsuit," June 28, 2012
  13. ↑ 13.0 13.1 Health Care Compact.org, "The solution," May 14, 2011
  14. ↑ 14.0 14.1 John W. Pope Civitas Institute, "Health care compact gives healthcare back to states," May 10, 2011
  15. ↑ The Heritage Foundation, "Interstate Competition and Choice in Health Insurance: The American Way" 16 March, 2010
  16. ↑ Townhall, "Forget Repeal and Replace"
  17. ↑ Health Policy Solitions.org, "Opinion: The false promise of healthcare compacts," May 9, 2011
  18. ↑ 18.0 18.1 The Tennessee Health Care Campaign, "Why the healthcare compact bill is bad for Tennessee," May 14, 2011
  19. ↑ 19.0 19.1 Texas Constitution and Statutes, "Interstate Health Care Compact," accessed March 12, 2016
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