Where is the Progressive push for an ERISA Waiver?

Progressives in Congress seem to have dropped the ball on what could be one of the most important health care deals of the year. The best hope for future progressive state health care reform might slip away without anyone on the left even noticing.

Currently, there is talk around a small bipartisan health care reform package. The potential proposal mainly contains Republican promises to actually continue to implement the ACA’s cost sharing reductions in exchange for a modification of the law’s Section 1332 State Innovation Waivers. That would let red states relax some of the law’s regulations. Overall, this is a terrible deal for progressives, but there is a chance to make it fair.

If progressive Democrats insisted any deal that changes ACA state innovation waivers also include the ability to waive parts of the Employee Retirement Income Security Act of 1974 (ERISA), it would be a true ideological compromise and one that could be deeply important long-term. It would achieve the conservative goal of returning more power to the states and make progressive state reform possible.

ERISA effectively prevents states from doing anything to regulate large employer health insurance. It has been a major hindrance to state health care reform efforts large and small over the decades.

For example, back in 2007 a Maryland law to make large box stores provide health insurance was overturned because it violated ERISA. Similarly, last year the Supreme Court threw out a Vermont law that would create an all-payer claims database. Without states even being able to gather basic data, it is almost impossible for states to seriously consider any reforms based on liberal or conservative principles.

ERISA would likely be a massive legal and financial hindrance to any state single payer effort, but it also prevents more modest reforms that move in that direction.

For example, Hawaii’s employer mandate is the only state law exempt from ERISA because it was approved before the federal law. The Hawaii law is highly effective, keeps costs low, and it is popular; but for four decades no other state has been allowed to copy it. Similarly, states’ attempts to make American health care more like the Swiss health care system with its all-payer system would likely face ERISA issues.

If any group or politician claims to really want state single payer but isn’t actively fighting to get an ERISA waiver included in any deal, they are simply not serious about the politics or the policy.

Achieving state single payer would be a major undertaking that will require winning numerous fights, but this is one of the most important and easiest. If the progressive grassroots isn’t even trying to fight for it right now, they might as well just give up entirely.