Home / Blog / Article


May 2 2011

Health Care Compacts: Reform from the States

Hadley Heath

"Health Care Compact" legislation has been introduced in as many as 13 state legislatures.  Notably, Georgia Governor Nathan Deal has already signed an inter-state compact bill into state law. 

...which leads us to the question: What is an inter-state health care compact?  In very basic terms, the compact legislation appearing in various states today is generally meant to offer an alternative to the top-down federal reforms in the Patient Protection and Affordable Care Act, and to give states a chance to enact their own reforms.

The Constitution clearly allows for inter-state compacts, and case law has expanded the use of compacts to various activities- so long as the federal government's jurisdiction is not overstepped.  Today there are already more than 200 compacts in effect.

In health care, the recent advancement of inter-state compacts is clearly a rejection of the federal government's attempt to reform and micromanage the health care system through the PPACA.  The Constitution does not place health care regulation within the enumerated powers of the federal government, and therefore, at least until March 2010, states maintained some control in this area.  

Returning control of health care regulations to the state level would allow groups of states (or ideally one group of all fifty states) to introduce cost-reducing, patient-centered reforms.  For example, states could join together in a compact and allow consumers to purchase health insurance across state lines. 

The goal of health reform should never be to put more control in the hands of bureaucrats - not federal bureaucrats, and not state-level bureaucrats either.  But if states enter into a health care compact, this could be a first step toward moving control away from Washington and closer to individuals.  State governments have fewer constituents to serve and therefore can more effectively define and solve problems in health care than the federal government can.  

(Obviously only individuals know what they want and need most in their personal health care decisions, and no government solution is as decentralized as a real free market.  But any move toward decentralization gives us hope - especially for those states that want to move toward more freedom, more affordability, and more choice.)

Arizonians were near success in their efforts toward a compact law; both houses passed a compact bill, but Gov. Jan Brewer vetoed it.  She wrote in a letter that the compact bill violated Article 3 of the AZ constitution.

And the governor's pen isn't the only potential obstacle that health care compacts could face: It's unclear whether or not an inter-state compact of this nature would require President Obama's signature.  Given that in February, he dared governors to outdo his health reform scheme with new ideas of their own, you would think he would be saying thank you for health care compact legislation.

But sadly, there is plenty of opposition to freer markets and freer people when it comes to health care.  Only time will tell if states have success with this compact initiative, but it's worth paying attention to the various and persistent efforts of states to fight back against Obama's health law.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
Follow us