States going to court over healthcare

The new health care reform bill achieves much of its savings by passing off unfunded mandates to the states – and those state budgets aren’t exactly in a position to absorb large new spending plans.

Meanwhile, some employers are weighing the cost of fines against the cost of rapidly rising insurance premiums, and starting to wonder if it might just be much cheaper to drop employee coverage outright. At most, they’d be required to pay a fine equal to 8% of the worker’s wages – medical costs are closer to 18% of GDP and that means a worker’s insurance costs are likely to be more like 20-25% of their salary since their children and spouses are also covered.

In response, there is a growing movement for legal relief in the federal courts.  Currently, 20 states have signed on to the suit seeking to prevent the healthcare legislation from moving forward.

Complaints about the health reform package will take on many forms:  from questions about the legal role of the federal government and their constitutional legitimacy, to concerns that small businesses and independent contractors will be left out in the cold (once again.)

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