Connecticut Attorney General's Office

Press Release

June 18, 2010

            Attorney General Richard Blumenthal, after extensive legal research and careful balancing of the costs and potential benefits to Connecticut, concludes that a lawsuit challenging the federal Patient Protection and Affordable Care Act (the Act) would have virtually no chance of success -- and may actually harm state taxpayers.

            In a response to a request by State Senate Republicans, Blumenthal noted that Gov. M. Jodi Rell has not requested such legal action -- and is actually seeking federal approval to transfer 45,000 current recipients of a state-funded medical program into the Medicaid program pursuant to the Act, which will save Connecticut at least $53 million over the next 15 months alone.

            According to Rell’s public statement, the SAGA medical program is currently 100 percent funded by the state, but once the recipients are transferred to the Medicaid program under provisions of the new Act, 60 percent of the cost of their care will be reimbursed by the federal government, resulting in substantial ongoing savings to the state. 

            In light of these savings, and several other legal considerations, Blumenthal said filing a lawsuit to undermine the Act could financially harm Connecticut.

            “As demonstrated by Governor Rell’s announcement of at least $53 million in savings to the SAGA medical program next year alone, the requirement to expand certain Medicaid populations will actually significantly benefit -- not harm -- the state. In light of these significant savings, and others that may be identified, joining the lawsuit filed by states whose health care programs may be vastly different from those in Connecticut would be fiscally imprudent.

            “Connecticut and its residents stand to realize important benefits from the Act, including expanded access to quality affordable health care, the prevention of unfair insurance practices, and a potential grant to preserve and expand the University of Connecticut Health Center. It would be rash and presumptuous to block the Act from taking effect without a clear understanding of its overall effect on Connecticut, especially since many of the challenged provisions will not take effect for years.

            “It remains doubtful that the Act will impose on Connecticut the kinds of far-reaching fiscal harms alleged in other states’ lawsuits. Those lawsuits assert that the Act will place new burdens on the litigating states’ existing Medicaid programs by expanding eligibility criteria, and that it will require the costly creation and administration of Health Care Exchanges. States with existing health insurance exchanges and broad Medicaid coverage -- such as Connecticut -- stand to benefit from the Act’s provisions more than states with no exchanges and narrower coverage.

            “Connecticut’s existing program to provide health care access to its citizens, both in its Medicaid and other programs, is among the most comprehensive in the nation. Connecticut already administers a Health Care Exchange for clients of HUSKY A, HUSKY B and Charter Oak. The Act provides for nearly full federal funding for expanded Medicaid populations, rather than the current 50-50 division between federal and state funding. 

“While one might object to this mandate on philosophical or policy grounds, the legal analysis to determine its constitutionality requires only that Congress has reasonably concluded that the provisions of the Act promote the general welfare. 

            “Even if you support efforts to reform health care, as I do, you may still hope that changes are made to build on this good first step, and improve it,” Blumenthal said. “I personally believe, for example, that we must do more to contain costs and I was deeply disappointed in the Administration’s decision to deny the Government the authority to negotiate prescription drug prices in Medicare. Clearly, however, such issues raise policy problems, not legal ones. They should be addressed through legislation, and not through the courts.

            “Even in the unlikely event that claims asserted by other states were to succeed, any relief and conclusions as to the Act’s constitutionality would apply with equal force to Connecticut, at no litigation expense to our taxpayers.”

            The thrust of these pending legal challenges by other state attorneys general is that the Act -- particularly the individual mandate to purchase health insurance -- exceeds congressional power. Under clear and longstanding principles of constitutional law set forth by the United States Supreme Court, Blumenthal said the Act falls well within Congress’ power and is therefore constitutional.

            The Constitution vests Congress with broad authority to enact legislation to regulate interstate commerce, to establish and collect taxes for the general welfare, and to enact laws that are necessary and proper to effectuate proper federal legislative purposes.

            Further, the Act falls well within Congress’ powers under the Commerce Clause, which gives Congress the authority to “regulate commerce . . . among the several states.” A conclusion that the Act violates the Commerce Clause would require a reversal of over 70 years of settled Commerce Clause jurisprudence and doctrine extending back through the creation of Medicare, Social Security and Medicaid and countless other vital and popular federal programs that have been the law of the land for decades.

            The test of the constitutionality of legislation enacted under the interstate commerce clause is whether Congress could reasonably conclude that the economic activity it regulates has a substantial effect on interstate commerce. The Supreme Court has sanctioned a wide array of congressional regulation, including regulation of both sales and consumption of goods and services.

Blumenthal said there are few industries in our economy that more substantially affect interstate commerce than the health care industry.

“The costs and burdens of providing health care to approximately 30 million uninsured Americans substantially affect interstate commerce,” Blumenthal said. “Commerce in goods and services across state lines relating to health care accounts for a significant portion of our national economy.” 

Blumenthal noted a January 2010 report from the state Office of Health Care Access (OHCA) that found uninsured patients cost Connecticut hospitals approximately $215 million in fiscal year 2008 alone -- a 34 percent increase since fiscal year 2006. Nationwide, OHCA cited estimates putting the cost of providing uncompensated health care, the vast majority of which results from uninsured patients seeking treatment, at over $36 billion annually -- a tenfold increase since 1980.

            “Failing to purchase health insurance does, and likely will continue to, result in significant impediments to the expansion of access to health care, increasing costs to individuals, insurance companies, and other participants in interstate commerce with respect to health care,” Blumenthal said.  “Congress reasonably concluded that adding these individuals to insurers’ risk pools is essential to lowering health insurance premiums for all policy holders and to the survival of the insurers themselves because all insurers are now required to provide coverage for pre-existing conditions.”

Patient Protection Affordable Care Act - (PDF-978KB)