With support apparently growing for the Schwarzenegger plan in California, opponents are already laying the groundwork for a legal challenge. The Financial Times (UK) quotes business sources as saying lawsuits are "all but inevitable" if the plan passes in Sacramento. That could tie the effort up in court "for years" — perhaps even until after the 2008 elections. According to the newspaper, challengers are likely to use a strategy based on the one used to overturn Maryland’s "Wal-Mart law" last month.
"Jack Bovender, chairman and chief executive of HCA, the big hospital group, underlines the legal problems faced by such state efforts. "we’re pleased that some states have recognized the gravity of the issue of the uninsured. However, a patchwork of state plans is problematic because of potential problems with ERISA (The Federal benefits law.) That 1974 statute, the Employee Retirement Income Security Act, in effect nationalized employer health plans to spare companies the cost of complying with conflicting state benefits.
"Legal challengers are (also) likely to claim that the plan imposes a disguised tax and so should require a two thirds vote of the legislature, since California law mandates a super-majority for tax increases. Alternatively, opponents will try to use the Erisa law."