What’s NC Waiting For? The Call for a Healthcare Compact

The Patient Protection and Affordable Care Act (Obamacare) continues to threaten state sovereignty and individual rights.  With the uncertainty of the U.S. Supreme Court decision still looming, states must find ways to counteract this federally intrusive legislation, no matter the judicial outcome.

A Healthcare Compact (Compact) could be the solution to bringing power and control over healthcare back into the hands of the states and ultimately, individuals.  The Health Care Compact Alliance has promoted model legislation that has been endorsed by the American Legislative Exchange Council.  Within the language, several fundamental provisions are laid out.

Essentially, a compact is an interstate agreement between two or more states, approved by Congress. The first step begins at the state level, where the compact must pass both chambers of a state legislature and be approved by the governor.  Once approved at the state level, the compact would need to be approved and ratified by U.S. Congress, allowing the compact to supersede any conflicting federal laws or regulations.  It would not require the signature of the U.S. President to take effect.  After being “federalized” by Congress, the compact could then be implemented within the participating states. A compact may also bind all future state governments and even state constitutions under the U.S. Supremacy Clause.  However, most compacts have provisions for withdrawal and dissolution should the participating member states choose this path down the road.

Interstate compacts have been used throughout American history to allow states to coordinate in important policy areas.  Such compacts are authorized under Article I, Section 10 of the U.S. Constitution.  To date, more than 200 compacts have been authorized and are in effect.  Compacts currently in place regulate criminal background checks, environmental standards, education benefits, regional transportation systems, just to name a few.  While the states have never used a compact to explicitly circumvent existing federal law, there is no legal barrier to use a compact in this manner.

In this case, the Healthcare Compact could enable states to cooperate in order to undermine much of the federal regulation and mandates contained in Obamacare (excluding military healthcare).  Under the Compact drafted by the Health Care Compact Alliance, each state receives annual healthcare funding from the federal government. The funding is mandatory spending for the federal government and is not subject to annual appropriations. Funding for each state is calculated from a 2010 baseline of healthcare spending and then adjusted annually for changes in population and inflation.

Funding under the Compact would transform federal payments to providers and states for Medicare and Medicaid services into a single block grant payment to each state. Currently, funding for the Medicaid program is divided between the states and federal government. The federal government provides it funding with several strings attached, with different payout rates for different services or eligible populations for example. Medicaid is administered by the states, with limited leeway for what services and population groups it covers due to broad oversight by the federal government. Medicare is a federal program, administered at the federal level. Under the Compact, states would govern these programs.

Furthermore, the Compact does not stipulate a particular form of healthcare system.  Instead, it allows healthcare policy to be determined at the state level, where decisions can be made based on the healthcare needs and financial constraints of each particular state. For example, if one state wants to implement a socialistic “mini-Obamacare” for its state citizens, it may do so.  The competing “laboratories of democracy,” with differing state healthcare systems, will eventually prove that more socialistic models are unsustainable while free market healthcare systems prosper and flourish long-term.  Finally, like other compacts, participating member states can also withdrawal at any time.

The Healthcare Compact has been introduced in 13 states since February 2011. Four states – Texas, Georgia, Oklahoma and Missouri – have already adopted the Compact while almost half of the remaining states are actively considering the Compact.  The North Carolina legislature, on the other hand, has never introduced Compact language.

Will North Carolina continue on its path of an unsustainable healthcare system with too much dependency on the federal government and crippling financial debt, or take back its healthcare rights?  The Healthcare Compact would give North Carolina the power to roll back the federal overreach in our healthcare and bring control back to where it belongs – with the patient.

This article was first published in the Lincoln Tribune on February 2, 2012.