The legislature recently passed HB 2, which would exempt North Carolinians from some of the requirements of ObamaCare.

Attorney General Roy Cooper has just sent a letter and memo to Govenor Perdue arguing that the bill is unconstitutional and could threaten NC’s Medicaid program.

Let’s address the AG’s arguments:

AG: HB 2 violates the Supremacy Clause

Comment: If courts deem a state statute to be in conflict with a constitutional federal law, then the federal statute would trump the state statute.

This doesn’t mean that HB 2, in and of itself, is unconstitutional because a court may strike down the law.  The AG presumes that because Congress passed a law, states must do whatever Congress wants even if the federal law is unconstitutional.

The AG’s own memo cites from the Supreme Court: “the federal judiciary is supreme in the exposition of the law of the Constitution..”  This is the principle of judicial review–the Supreme Court, not Congress has final say on what is constitutional.

Further, states can make decisions on compliance with federal laws.  They don’t have to automatically do whatever Congress wants.

In fact, states regularly pass laws that are in direct conflict with federal laws, for numerous reasons.  A recent example is the REAL ID Act.  Numerous states passed laws refusing to comply with the REAL ID Act for cost reasons, which is a far cry from objecting to a law based on constitutional grounds. 

The North Carolina House, in 2008, passed a bill refusing to comply with the REAL ID Act.  There were 62 Democrats who voted in favor of the bill and only 3 that voted against it.  There were only 7 Republicans that voted for it, and 42 Republicans that voted against it.  Clearly, the idea of passing laws that are in conflict with a federal statute is not a partisan issue.

If the judiciary strikes down HB 2, then the law, of course, shouldn’t remain in place.  However,  North Carolina doesn’t have to preemptively strike down its own laws.

The AG memo argues “The State and its residents must comply with the ACA [ObamaCare] until and unless a court orders otherwise.”  This is 100 percent wrong.  The state and its residents have every right to not comply until a court orders otherwise.*

AG:  HB 2 “could jeopardize federal funding of Medicaid in North Carolina.”

Comment: Let’s take the AG’s argument step-by-step.

ObamaCare requires states to collect a $500 fee from health care providers to help fight fraud and abuse in Medicaid.

HB 2 “provides that no law or rule may impose a fee on a person for ‘contracting with…a public…health care system.'”

The AG’s conclusion is therefore North Carolina would be avoiding its compliance requirements under Medicaid because HB 2 wouldn’t allow the collection of the $500 fee.

Here’s the problem with this argument: The $500 fee is being collected to fight fraud and abuse.  It is not a fee imposed on a person for contracting with a public health care system. 

In other words, the clear language and intent of HB 2 are addressing fees that punish people for the purpose of “contracting with, or enrolling in, or failing to contract with or enroll in, a public or private health care system or health insurance plan.”

A fee to combat fraud and abuse is completely unrelated to such a purpose.

That’s it for now.  My book on the subject will come out soon.

*State legislatures shouldn’t just pass laws knowing they are likely to
be unconstitutional–but that problem doesn’t exist here.  Regardless
of one’s views on the legality of ObamaCare, there clearly is a real
chance it will be struck down–thus making HB 2 constitutional.