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PSN on October 6, 2010 - 12:00am
by Nicholas Kusnetz, The Nation, October 6, 2010
In April 2007 an orthopedic surgeon in Arizona began a fringe fight over healthcare policy with the help of some libertarian supporters. Now, thanks to the intervention of a conservative policy group, that initiative has become a central issue of the 2010 elections.
The American Legislative Exchange Council (ALEC) has a history of using its web of state legislative connections to drive national debate, quietly pushing the agenda of its corporate backers [see Kusnetz, "Where Bad Bills Come From," June 28]. With its model legislation, the Freedom of Choice in Health Care Act, ALEC is encouraging state legislators to begin chipping away at the central components of the Obama administration's healthcare reform before it's fully implemented. What's more, ALEC and its allies have already contributed to a growing legal challenge that could give the conservative Supreme Court an opportunity to overturn the legislation even if Congress does not.
From their beginnings in Arizona to their nationalization through ALEC, the so-called healthcare freedom acts have followed a course charted by a network of conservative organizations created by wealthy donors. The acts are an indication that the most important fights over healthcare may take place not in Congress but at the state level and in the courts.
In 2007, before the healthcare debate was making national headlines, Eric Novack, the Arizona surgeon, conferred with Clint Bolick of the Goldwater Institute and Sally Pipes, president and CEO of the libertarian Pacific Research Institute. Massachusetts had passed its universal health coverage the year before, extending subsidies to the state's poorest and requiring those who could afford it to buy insurance. Novack wanted to prevent anything similar from passing in Arizona.
The group drafted a citizen initiative in 2008 that would have amended Arizona's Constitution to prevent any laws from compelling a person to buy insurance. It would also have secured a right for individuals to pay directly for any service, in essence precluding a single-payer system. The initiative failed to pass, but it gained the attention of libertarian groups and donors, who saw the potential to promote their core principles. Frayda Levin, who sits on the board of the conservative advocacy group Americans for Prosperity and is a prominent donor to the libertarian Cato Institute, gave $100,000 to the initiative. "It was the one opportunity, I felt, where we could continue to have some choice," she told me. "This is about individual liberty, and it's a huge deal."
Within a month of the initiative's failure in November 2008, ALEC had adopted the cause and crafted model legislation based on the failed initiative. "The bill seeks to ban a Canadian-style, single-payer healthcare system," a spokesperson for the group told me in an e-mail.
ALEC brings together state legislators and lobbyists from the country's largest corporations to form issue-based task forces. These committees write antiregulatory model bills that legislators then introduce in their capitols. The group is almost entirely funded by its corporate members, including Koch Industries, ExxonMobil and the heavyweight pharmaceutical trade group PhRMA.
Most recently, ALEC and its corporate allies defeated attempts to regulate greenhouse gases. It's now clear that climate-change legislation is dead for the foreseeable future, and there's an alarming wave of climate-change-denying candidates running for office in November. ALEC is also behind a vigorous assault on various state and regional pacts, such as the Regional Greenhouse Gas Initiative. Other prominent campaigns have included pushing for conservative education policies and opposing net neutrality.
With the healthcare freedom act, the group's legislative members followed ALEC's lead, filing or prefiling bills in thirty-eight states, according to the organization. Six of those measures have passed. In August Missouri became the first state in the country to amend its Constitution to enshrine the act's goals. In states that pass them, the acts could handcuff agencies from implementing parts of Obama's reform. They could even help build momentum to dismantle the reform entirely, providing political cover for Republicans and their recently announced Pledge to America, which promises to repeal federal healthcare reform.
The "individual mandate"—the requirement that all individuals have health insurance—is one of the more unpopular aspects of Obama's reform package, and the bills' proponents have seized on that weak spot to attack overall reform. Sponsors of the efforts in Arizona and Missouri told me they suspect federal reform is only the first step toward a single-payer system, and that insurers and the business community are worried about the same thing. "They realize federal government is putting a huge financial and regulatory lug on them," says State Senator Jane Cunningham, who sponsored the Missouri bill.
In its immediate policy implications, the state amendment changes little for Missourians, nor would similar initiatives now on the ballot in Arizona, Colorado and Oklahoma, if voters pass them in November. Because the Constitution's supremacy clause ensures that federal law supersedes those of the states, the acts' central tenets would take effect only if the legislation Obama signed in March is repealed or ruled unconstitutional by the Supreme Court.
"It's not real," says State Representative Kyrsten Sinema, the second-ranking Democrat in Arizona's House. "The only thing that will change in Arizona if this amendment passes is, we'll have another expensive lawsuit on our hands." Sinema is on the board of the Progressive States Network, a national group of state legislators, and she has met with her peers around the country to help them counter healthcare freedom acts. As their greatest success, she cites the twenty-six states that did not pass the measure.
But the forces fighting healthcare reform have a longer-term strategy. In conjunction with the bills, more than twenty state attorneys general and governors have filed suit with the goal of influencing the federal courts, and eventually the Supreme Court. In Virginia a federal judge used a healthcare freedom act that state legislators had passed only weeks before the lawsuit was filed to rule that the state had standing to challenge the federal reform.
"A state can't nullify a federal law, so the only question is, Is the federal law constitutional?" says Timothy Jost, an expert in health law at Washington and Lee University. Jost notes that in addition to its unpopularity, the individual mandate is one of the weaker aspects of the reform legally and provides an opportunity to attack the bill's constitutionality. But still, he says, even the conservative Supreme Court would have to change course dramatically to strike down the mandate.
That could happen, says Simon Lazarus, public policy counsel for the National Senior Citizens Law Center. Lazarus has written about the lawsuits and is not as quick as Sinema to dismiss the threat the initiatives pose. "Over a period of time, frankly, it makes it much more likely that our five friends on the Court would feel emboldened to carry their water for them," he says, speaking of the conservative justices and their ideological counterparts who are pushing the bills and lawsuits.
Lazarus points to the High Court's recent ruling on the Second Amendment, which gives individuals and not just militias the right to bear arms. That ruling would have been unthinkable, he said, without decades of organizing by the National Rifle Association and other gun-rights advocates. "I think there's a great deal of interplay between what happens in the courts and what happens on the political ground."
This may help explain the prominent role of groups like Americans for Prosperity and the Cato Institute, and their wealthy supporters, in pushing these bills nationwide. Board members of the groups have contributed tens of thousands of dollars to the initiatives in Arizona and Missouri. In Colorado, the Independence Institute, which addresses public policy issues from what it calls a "free-market, pro-freedom perspective," is the primary backer of that state's ballot initiative.