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AG questions constitutionality of health-care bill

February 5, 2010

Not only would federal health-care legislation significantly cost Indiana if passed, the state's Attorney General also believes aspects of the legislation could be constitutionally questioned and possibly overturned by courts.

Indiana Attorney General Greg Zoeller issued a 55-page report today studying the constitutionality of the U.S. Senate-created health-care bill and what its impact might be on Indiana. The in-house research and drafted report comes a month after some of Indiana's congressional delegation asked the state agency to review provisions of the Patient Protection and Affordable Care Act under Indiana Code 4-6-8-2 that allows this specific review if requested.

If the legislation is passed, the AG has determined that Indiana would bear substantial economic costs - roughly about $500,000 more added to the Medicaid rolls - and create unintended consequences for patients, taxpayers, and the state's medical-device industry.

Legally, the report notes that some provisions could be struck down in a court challenge:

· The bill's "individual mandate" requiring everyone to buy health insurance or face a penalty would be unprecedented; never before has the federal government required Americans to purchase any good or service, nor has it regulated inactivity.

· The bill's "Nebraska Compromise" amendment would expand the number of Medicaid participants in all states but fully fund the expansion for Nebraska only, while the other 49 states would have to absorb additional costs. While courts are properly reluctant to second-guess legislative deal making, such disparate treatment of one state appears to violate Article I of the U.S. Constitution, the report says.

· The bill would also require states to create insurance "exchanges" and require for-profit health insurers to offer certain types of coverage, making private insurers essentially highly regulated entities similar to public utilities, the report says. Before insurance exchanges are available, states would have to administer a temporary reinsurance program for high-risk patients. That mandatory obligation on the part of state officials might be found unconstitutional, according to the report.

The full report can be viewed online.

While passed by the Senate Dec. 24, the health-care proposal remains pending in Congress and the Indiana Attorney General's Office report is being offered for legislators to consider as that process continues.

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