U.S. states girding for battle over healthcare reform

By Karen Pierog and Lisa Lambert

CHICAGO/WASHINGTON (Reuters) - Lawmakers in some U.S. states are laying the groundwork to potentially block national healthcare reform at their borders, as the federal government's plan to create a new system steams forward in the U.S. Congress.

Several states are considering amending their constitutions to prohibit any law or rule requiring people or employers to participate in any healthcare system.

"There's going to be a significant number of states that will at least consider these types of resolutions in the legislatures in 2010," said Michael Boldin, founder of the Tenth Amendment Center, a think-tank on the proper role of the federal government.

"Whether they pass and the next step -- whether they get approved by voters in the next year -- is another story."

On Wednesday, Democratic U.S. Senator Max Baucus unveiled a 10-year, $856 billion healthcare overhaul that would set up state insurance plan exchanges and mandate prescription drug coverage under the Medicaid program for the poor jointly administered by the federal government and states.

The Tenth Amendment to the U.S. Constitution says that "powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states."

For some states, a national healthcare plan steps over the division of power inherent in the amendment.

So far, Arizona lawmakers have put an amendment on the November 2010 ballot for voter approval, while similar measures are under consideration in Florida, Michigan, Georgia and Louisiana, according to Boldin.

Oklahoma State Representative Mike Ritze, a Broken Arrow Republican, said on Tuesday he was readying a resolution to give voters in his state the ability to protect and preserve their existing healthcare coverage.

"We feel like the federal government does not have any jurisdiction over healthcare to begin with," he said.

"We hope that no matter what the Congress tries to enact, we as a state can have some common sense out of this nonsense and allow our people to decide what they want," said Ritze, who is also a physician and surgeon.

This so-called nullification process is not new for states.

Most recently, 18 states refused to follow the REAL ID Act of 2005, a federal standard for driving licenses, which are issued by states.

Michael Bird, legislative counsel for the National Conference of State Legislatures, said that when passing laws that involve the states, the federal government will usually include sections that "puts pretty large chips on the table," to convince them to comply.

"States don't have to do the REAL ID act, however there is a sanction imposed if they don't," he said. "And that sanction is that drivers' licenses that are not compliant with the REAL ID regulatory requirements won't be recognized for boarding aircraft, entering federal buildings or trying to get into nuclear facilities."