Health Care Policy - Local or Federal?

January of this year, San Francisco got the nod from the United States Court of Appeal to implement its new health care plan that would insure all off its residents. This new move is part of Mayor Gavin Newsom’s “Healthy San Francisco” program which he established in 2005 to, over time, become San Franciscans’ sole health care provider. The funding for the expansion of “Healthy San Francisco” to cover all residents, and not just those at or below the poverty line, will be coming from an increased tax on businesses as well as funding from the Federal government. The new mandate requires that employers spend between almost double what they would have, per hour per employee, on health care for that employee, or send that money to the program itself where employees can go collect.

But getting here for Mayor Newsom was like trying to drive down Lombard Street. When the mandate was first introduced, it was challenged vigorously by analysts and business owners in San Francisco. The business owners took the city to court and challenged the city’s authority to pass such a mandate. On December 26 of this past year, Judge Jeffrey White agreed with those business owners and found against the city, citing that the mandate violated the 1974 Employee Retirement Income Security Act (ERISA) which is a federal law that regulates employee sponsored health benefits. Opponents of the mandate claim that ERISA clearly checks the power of the state legislature against making policy directed toward employers and that the power to do so lies solely with the federal government.

So how did the plan pass? The judges at the Appeals Court thought that “the public interest would be served” with this new mandate. But upon additional inquiry, one sees that the issue at hand is not just the program itself but who has the power to make the program; a problem born out of our federal system.

The Department of Labor explains ERISA as a federal law that has sets the minimum standards of health care and pension plans for employers in the private industry. Nowhere in the explanation is there a mention of the federal government limiting or regulating the health care or pension plans. Furthermore, the 10^th amendment of the constitution states that unless specified, the default power lies with the states.

The feud between the states and the federal government continues as the repercussions of this decision have warned Governor Arnold Schwarzenegger and Assembly Speaker Fabian Nunez as they gear up to argue their state-wide universal health care plan, which also has an employer mandate, in front of the Legislature.