South Carolina this week could become the first state in the country to restrict the enactment of Obamacare since the U.S. Supreme Court upheld that law last year.
A proposed bill, on special order in the state Senate, would allow the state attorney general to take businesses, including health insurers, to court if he “has reasonable cause to believe” they are harming people by implementing the law. The bill already has passed the House.
If it passes, the bill could push South Carolina to the forefront of Obamacare resistance, giving the state’s Republican leaders a national stage. It also could push South Carolina into yet another costly legal battle in the federal courts that, critics say, is unnecessary and avoidable.
“It is going to get us in court, as we all know. But ... it is worth the risk to see if we can protect our state from this far-reaching federal legislation,” state Sen. Kevin Bryant, R-Anderson, one of the lawmakers pushing for the Senate to pass the bill this week before it adjourns for the year.
Many Senate Democrats, and some Republicans, dismiss the bill as nothing more than a symbolic political salvo meant to provide fodder for lawmakers’ legislative newsletters and campaign signs. But health-insurance companies are worried the bill could complicate further their efforts to navigate the regulatory landscape.
“We need to make sure that companies – health-care providers in South Carolina – aren’t faced with situation where the federal government says you must and the state government says you cannot,” said Bob Coble, an attorney for Nexsen Pruett who represents several hospitals.
For example, some health-insurance companies say the bill would prevent them from helping customers buy insurance through a federally operated health-care exchange, designed to lower costs by federal subsidies and pooling insurance.
“If all of a sudden it becomes illegal for me to help a citizen go through an exchange and get a subsidy, that kind of defeats a lot of the purpose of trying to help them get coverage,” said Mark Riley, legislative chairman for the S.C. Association of Health Underwriters.
But state Sen. Larry Martin, R-Pickens, said nothing in the bill would prevent a business from participating in a federal health-insurance exchange, rejecting the suggestion the bill would make businesses “choose state law or federal law.”
“That doesn’t seem to be in there,” he said.
What is troubling about the bill, Martin said, is a provision that effectively would wipe out federal tax penalties for not complying with the law. For example, if someone refuses to buy health insurance, that person would have to pay more in federal taxes. But if South Carolina passes the proposal, that person would get a state tax deduction to offset their increased federal taxes.
Martin said he cannot support that. “No. 1, it is an unknown amount of money involved, and No. 2 ... all you would be doing is encouraging folks not to pay for insurance so their fellow South Carolinians can pay the premium for you.”
But Bryant compared the tax deduction to the economic incentives the state awards to companies to locate in South Carolina.
“Every time we give a tax credit, the taxpayer pays for it, essentially,” Bryant said. “You can get a tax credit for everything under the sun.”
Republican Gov. Nikki Haley was an outspoken opponent of expanding the state’s Medicaid program under the Affordable Care Act. Haley’s spokesman would not say Monday if Haley would sign the anti-Obamacare bill if it comes to her desk.
“The governor has also been very clear about her priorities this session – blocking Obamacare’s Medicaid expansion, restructuring and ethics reform,” Rob Godfrey said in a written statement.
Haley might not have to decide whether to sign the bill this year.
The Senate is scheduled to adjourn for the year at 5 p.m. Thursday. While the bill is on special order – making it harder for lawmakers to pass it over – it is behind the ethics reform bill, which could take several days to debate and pass.
“I can’t venture to see any type of possibility that it passes this session,” said state Sen. Gerald Malloy, D-Darlington, who said he likely will oppose the bill. It could pass next year, Malloy added, but only after “one of the most extensive debates we have had in recent times.”