“Obamacare” nullification bill on SC Senate agenda

abeam@thestate.comJune 3, 2013 

  • ‘Obamacare’ in South Carolina The state Senate could pass H.3101 this week, a proposal to limit the implementation of the federal Affordable Care Act in S.C. Four things it would do:

    1. Prevent any state agencies or employees from aiding “any agency in the enforcement of ... the Patient Protection and Affordable Care Act of 2010.”

    2. The attorney general could sue people or businesses that he “has reasonable cause to believe” are harming people or businesses by helping enact the Affordable Care Act.

    3. Any S.C. resident who pays higher federal taxes because he or she did not comply with the Affordable Care Act would get a corresponding deduction on his or her state taxes.

    4. State and local governments could not buy insurance through a federal health insurance exchange.

— South Carolina this week could become the first state in the country to restrict the enactment of the Affordable Care Act 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 situations 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.”

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