File this one under two more reasons why the constitutional challenges to health care reform are frivolous. Over at Slate, Simon Lazarus and Alan Marrison argue that Virginia, Florida, and the 20 other states that have joined the lawsuits lack standing and can’t get around the Tax Injunction Act, which prohibits courts from “restraining the assessment or collection of any [federal tax]“:

The first problem is that state governments are the wrong plaintiffs to challenge the individual insurance mandate. No state will ever have to pay a penny in taxes or be told to take out health insurance: The law applies only to individuals. The attorneys general might have attempted to plug this gap by adding individual plaintiffs to their complaints. But even if they found those people, the AGs couldn’t sue on their behalf right now, because the mandate does not take effect until 2014. Between now and then, all kinds of things could cause plaintiffs to lose their standing to sue [...]

There’s another barrier to the AG’s lawsuits: the Tax Injunction Act. This federal statute, on the books for more than 50 years, forbids courts from “restraining the assessment or collection of any [federal] tax” whether the suit is by the taxpayer, a state attorney general, or anybody else. The tax code gives taxpayers who believe they ought not to have to pay a tax two options: decline to pay and make their objection as a defense when the IRS comes after them, or pay the tax and sue for a refund. Congress enacted these requirements to facilitate efficient tax collection, and there is no basis for the courts to carve out an exception for these suits.

Add this to the fact that some very recent Supreme Court decisions have found that the federal government can regulate commerce and you have 22 states wasting their taxpayer’s dollars on lawsuits they can’t possibly win. But then again, they probably know that. As the authors note, “Several of the AGs, including lead plaintiff Bill McCollum, are featuring the suits in their campaigns for higher office. And, of course, the suits make for great talking points in a general campaign to discredit health care reform.”

Sen. Patrick Leahy (D-VT), a long time supporter of ending the anti-trust exemption enjoyed by insurers, has filed an open amendment “to the pending Wall Street reform legislation” that would bar health insurance issuers or issuers of medical malpractice insurance from engaging in “any form of price fixing, bid rigging, or market allocations in connection with providing health insurance coverage or coverage for medical malpractice claims or actions.” The anti-trust provision passed in the House, but was not part of the Senate legislation or reconciliation package that ultimately became law. From Leahy’s office:

“The recent economic crisis showed all of us that corporations do not act responsibly without adequate oversight,” said Leahy. “It is important to remember that there is another industry that is not required even to play by the same rules of competition as everyone else. Benefiting from a six-decade-old special interest exemption, the health insurance industry is not subject to the Nation’s antitrust laws. We can surely agree that health insurers should not be allowed to collude to fix prices and allocate markets.”

All this sounds good, but it’s unclear if just lifting the exemption would lower health care costs or accomplish much of anything. As former anti-trust enforcer David Balto explained in an interview with the Wonk Room, “at some point in time, the anti-trust exemption probably served as some type of an obstacle and inhibited the federal anti trust agencies from going in and blocking some of the mergers that have led to such a concentrated market. At this point, there is really no need from the industry’s perspective, for an anti trust exemption. This anti trust exemption permits them to coordinate activities which would be considered collusion in other industries. When you are a monopolist, there is no need to collude.”

Removing the exemption would allow anti-trust enforcers to begin preventing anti-competitive activities and enforcing the new regulations of reform. But regulators will probably need some more funding if they’re going to prevent insures from entering into collusive arrangements that would undermine any new competition created by health reform.

Leahy’s amendment is one of approximately 90 amendments filed to the Wall Street reform measure and will require 51 votes to pass.

Last week, independent analysts in California discovered that WellPoint “overstated future medical costs” to justify its 39% premium increases in the individual health market and committed numerous other methodological errors. The company has since canceled the increases, but the discrepancy has led HHS Secretary Kathleen Sebelius to ask other states to review WellPoint’s increases:

In light of this recent finding, I urge that, to the extent you have authority to do so, you re-examine any WellPoint rate increases in your state to determine whether any mistaken assumptions similar to those made in California were made in your state.  Even small errors can mean unaffordable premiums for policyholders.

I also ask that you review the authority you have under your state law to determine whether you have all of the regulatory tools needed to approve health insurance rates before they take effect.  The ability to require insurers to modify an increase if a proposed rate increase is unjustified has been shown to be effective in many states.  The Affordable Care Act expressly contemplates support for state efforts in rate review, appropriating a total of $250 million to states to assist in meaningful rate review.  We intend to issue guidance on applying for that funding in the near future.

In February, a survey from the Center for American Progress Action Fund found that “double-digit hikes have been implemented or are pending in at least 11 other states among the 14 where WellPoint’s Blue Cross Blue Shield companies are active: California, Colorado, Connecticut, Georgia, Indiana, Maine, Nevada, New Hampshire, New York, Virginia, and Wisconsin.” And the Wall Street Journal reports that New York, Connecticut, and Iowa are taking a second look at the increases and possibly “considering additional action on other companies’ rate increases as well.”

Of course, as some consumer activists have pointed out, given business model, errors like these may be “not an aberration but may be the norm,” suggesting that lawmakers will have to do more than rely on state regulators — whose effectiveness varies from state to state– to prevent insurers from over-charging consumers. If more errors are discovered, Democrats could be in a good position to push through Sen. Dianne Feinstein’s (D-CA) federal rate-review authority.

Since President Obama signed health care reform into law, Republicans across the country have opposed the measure by introducing repeal legislation in Congress, passing state-based initiatives exempting specific states from the law, and filing frivolous lawsuits challenging the constitutionality of reform. Since recent Supreme Court precedent contradicts the GOP’s interpretation of the constitution and any state opt-out efforts are superseded by the federal law, most observers have argued that the GOP is seizing on the unpopularity of reform to rally their base and score political victories.

Indeed, last month the campaign of South Carolina Attorney General Henry McMaster, who is seeking the Republican nomination for governor, circulated a video touting his participation in Florida’s challenge. Documents surfaced in Wisconsin indicating that the Republican State Leadership Committee (RSLC) coordinated with Wisconsin Attorney General JB Van Hollen (R) about the state’s health care lawsuit.

McMaster has now issued a second ad titled ‘That’s My Job‘, “touting his challenge to the federal health care law as a key credential in his gubernatorial candidacy“:

MCMASTER: When President Obama and the Washington radicals pushed their unconstitutional takeover of health care, I pushed back. I led the fight to overturn the backroom deals – to defend freedom and to protect the sovereignty of South Carolina. Because that’s my job.

Watch it:

Repealing reform has also become an issue in the race to fill the late Rep. John Murtha’s seat in Pennsylvania. Republican Tim Burns has launched a completely counter-factual ad against former Murtha aid Mark Critz, attacking Critz for refusing to repeal “Obama’s radical health care bill” — in other words, something that only slightly resembles the actual health care law. Watch the ad here.