Pay No Attention To That Tax Behind The Curtain

"I want to spend very little time on that because it doesn't move us forward. What moves us forward is to solve the problem." --Gov. Arnold Schwarzenegger interview about his health-care plan.

One more and we've got a trend! This morning, Schwarzenegger essentially repeated the above statement during an online chat with business executives in San Diego. The governor wants people to stop obsessing over whether his proposed health-care plan includes a "tax" or a "fee." (He would charge doctors, businesses and hospitals to boost insurance coverage in California.)

Click here to view online chat.

The governor said today: "I am concentrating on getting health-care reform and insuring everyone in California rather than worrying about what is the definition of something." [Emphasis added.]

This is what's called a talking point.

But few things are more important, in fact, than whether Schwarzenegger's plan includes a tax or a fee. Schwarzenegger wants to define the surcharge as a "fee" because it allows the Legislature to approve the plan with a majority vote--bypassing Republicans.

But by doing that, Schwarzenegger risks running into the 1974 Employee Retirement Income Security Act. Only the federal government can mandate health-care benefits, to avoid conflicting laws state-by-state. Attorney Mark Johnson, a national expert on ERISA, told The Times that Schwarzenegger's plan--if it is challenged in court--would violate ERISA. Johnson said, "This would be a direct attempt to manage a plan. I don't think it would pass muster."

Lawyers all over California are examining a federal court decision out of Maryland over its pay-or-play system. Meanwhile, Schwarzenegger's people say his plan does not single out individual health plans and does not mandate specific benefits, so it would not violate ERISA. The governor's online chat was organized to "address the estimated $14.65 billion in hidden taxes that business currently pay due to the broken health-care system."

Now, that's a tax we can talk about.