Missouri: A State of Uncertainty on Health Care Regulation

Last month, a judge in Florida struck down the individual mandate component of the federal health care regulation, and declared that the Patient Protection and Affordable Care Act (PPACA) is null and void. He is the second federal judge to rule that the health care regulation is unconstitutional. Meanwhile, two federal judges have upheld the law. Policymakers are obviously divided on the issue, and this creates an uncertain business climate for the near future.

Many attorneys general have provided direction in their own states, but this group does not include Missouri Attorney General Chris Koster. By keeping quiet on the issue of enforcing the federal health care law, Koster increases the uncertainty in Missouri to a level above that in other states, which hurts business development.

When the government enacts policies that extend its authority to new areas, such as the impending health care regulation, it creates an unknown environment. Economists call this, “regime uncertainty,” a concept developed by the economic historian Robert Higgs. Because the health care regulation is so complex and convoluted, members of the business community are left scratching their heads. Instead of growing their businesses, they will spend time and resources figuring out how to comply.

Regime uncertainty has real, immediate effects for economic activity. It leads businesses and individuals in the private sector to hesitate to make investments or hire additional people. Koster’s silence also makes it difficult for government agencies in Missouri to plan for the future. As officials develop budgets, they need to know whether and how to allocate resources to comply with the health care regulation. The operations of multiple state agencies in Missouri would be impacted by the potential invalidation of the health care law.

Many experts expect that the question of whether the health care regulation is constitutional will go all the way to the Supreme Court. In the meantime, Missouri is in a state of limbo. Regardless of whether a higher court overturns the law in the future, businesses, lawmakers, and individuals in Missouri need to know how to act in the present. Do they need to adhere to the federal health care regulation, or don’t they? As the Republican leadership recently posited, “Must state officials follow its unconstitutional dictates, or should we ignore them as we see the top officials of other states doing?”

Koster didn’t sign onto the multistate lawsuit in Florida, despite having ample opportunity, along with resolutions from the state legislature, the will of the electorate, and his fiduciary duty to consider. The 26 attorneys general who signed onto the lawsuit in Florida have demonstrated that they find the federal takeover of health care to be unconstitutional. Missourians are left to wonder, what does Koster’s hesitation indicate? Does he support the lawsuit or oppose it?

What do we do now, Mr. Koster?

Christine Harbin is a policy analyst for the Show-Me Institute, an independent think tank promoting free-market solutions for Missouri public policy.