States Find Loopholes in Health Insurance Reform Legislation

Published: Fri 12 Feb 2010

Wendy Blair

Anyone who thought the fight about health insurance reform was just in Washington needs to think again. Turns out, no matter what Congress decides (if anything), your state could have something to do about it.

Recent actions by a group of Republican state senators in Virginia are sending a ripple effect through the nation. This group, with the help of some Democratic members of their senate, helped pass legislation that effectively gives the state of Virginia the right to ignore federal regulations related to health insurance.

If President Obama were to sign a bill that mandated the purchase of health insurance for all Americans (or pay a penalty), Virginia now has the right to prohibit enforcement of the federal law. And that means no matter what happens in Washington, your state could (in theory) ignore it.

Can that really work?

Perhaps. In theory, federal law always trumps state law. And if there were a challenge in court, the new Virginia law would probably be defeated.

However, there are similar proposals in more than half of the states that could also block federal insurance mandates from being enforced. The mere fact that states are trying to block this legislation could stop it in Congress.

Of course, the concept proposed, mandating that everyone have health insurance, isn't as revolutionary as one might think. Remember that most all Americans younger than 65 already have insurance provided through their employers, and those over 65 enjoy the benefits of Medicare. Those who would have to purchase insurance are likely poor and are already using existing systems and benefits for healthcare. The move could lower health insurance costs and other factors, which could take stresses off the healthcare system as a whole.

Election year issues

2010 is also an election year, which means this is becoming an even more political issue than it was in 2009. Democrat members of the House who are in vulnerable districts are slowly backing off health insurance reform, while Democrats in the Senate who are also up for re-election this year are thinking similarly.

President Obama has made a push in recent weeks to re-focus the health insurance reform debate, and to try to invigorate the debate. But with the elections looming and just months away, some experts say that the health insurance reform concept is fading rapidly.