Professor Shanske Publishes Op-ed on American Health Care Act
Professor Darien Shanske published an op-ed in Tax Notes on “How States Can Respond to the ACHA: Using the McCarran-Ferguson Act.” Co-authored with Indiana University School of Law Professor David Gamage, the article addresses the possibility that states would need to bolster their insurance markets following the passage of the American Health Care Act or other actions that could destabilize them.
The ACHA, which passed the House but stalled in the Senate, would “radically destabilize the individual insurance markets within each state, unless each state government promptly responded,” the authors write. Part of the danger would be that states that sought to retain Obamacare could see their efforts undermined by insurers that “designed plans around the skimpy essential health benefits of other states,” as would be permitted under the AHCA. States could respond by levying a tax on such insurers, which the authors argue would pass legal scrutiny thanks to the McCarran-Ferguson Act.
“[B]ecause of the McCarran-Ferguson Act, the dormant commerce clause does not restrict the states regarding the regulation or taxation of insurance. Thus, a state-level excise tax on insurance plans that use the skimpier essential health benefits definitions of other states should pass muster under the dormant commerce clause.”
Darien Shanske is a Professor of Law at UC Davis. His academic interests include taxation, particularly state and local taxation, local government law, public finance, and political theory, particularly jurisprudence.