In Do Nothing Preemption, Professor Lauren Roth takes on the legal thicket of preemption—the all-too-familiar hornet’s nest within the federalism-dominated landscape of health law. Roth’s project is particularly timely. Considering policy goals by the Trump administration as well as the recent assault on the agency-based administrative law order, preemption—where the federal government has largely impeded states from regulating in a particular space—is salient and important during a highly deregulatory era.
While telling a story about preemption, Professor Roth uses as a case study the effort to prevent predatory marketing by agents selling Medicare Advantage plans. This, which she presents as posing a real threat to access to health insurance for Medicare beneficiaries, serves as the lens for deeper observations about the structure and gridlock that produce a regulatory vacuum. Indeed, in this space, the federal government has prevented states from preventing pernicious marketing, but has had its own rules struck down by the judiciary.
Roth’s article, forthcoming in the Administrative Law Review, consults several important voices in the preemption professoriate while weaving in the story of Medicare Advantage, a highly regulated private version of the public crown jewel of Medicare. The harm is that its agents, due to profit interests, are incentivized to distort and misrepresent the upsides of the plans they are trying to sell, a problem that harms the elderly beneficiaries who are in the Medicare Advantage market. And without a federal solution, while preemption blocks state intervention, there is effectively no regulation.
On the doctrine, Roth defines the problem as she sees it as “do nothing preemption,” which fits next to work done previously on “null preemption” by Jonathan R. Nash and ERISA preemption done by Elizabeth McCuskey and Erin Fuse Brown. Differentiating Nash’s “null preemption,” Roth notes that “do nothing preemption does not involve an affirmative decision by the federal government both not to regulate itself and also to preempt state regulation.” Instead, in “do nothing” preemption, Roth says “courts are typically the villains—striking down federal regulation and forcing the federal government to do nothing even when state regulation cannot take its place.” In her story, it is the Northern District of Texas who plays this role, blocking reasonable federal regulation that would prevent deceptive marketing of these Medicare Advantage products—indeed, the only pathway to make real headway when state law options are blocked by federal law. Of course, one is left to wonder if, under her telling, the court’s action is sufficiently “villainous,” or if it was CMS’s failure to try again to regulate that led to the vacuum of regulation in this space; indeed, Professor Roth mentions that “CMS did not take further action” after the court’s action. Perhaps it’s both the courts and CMS—a realization that may supplement her argument.
Regardless of who’s to blame, the victim in this saga is the Medicare Advantage population, and the harm is the vicious actions undertaken by third-party marketing organizations that are incentivized to sell plans that may not benefit beneficiaries. The result, of course, is the stifling of state power and an increasingly concentrated and active role by the judiciary. Further, this inability to initially regulate allows industries to become entrenched and harder to restrict; in the interim, it becomes harder to uproot the powerful interests and activities that have embedded themselves in the marketplace.
In the way of solutions, Professor Roth suggests that states may be able to regulate using typical state law powers that govern licensing laws and plan solvency. Further, she highlights the importance of state efforts in counseling and information distribution. She also mentions how AI and technology can help clarify and improve this space. Interestingly, on the doctrinal side, Roth suggests a “conditional preemption doctrine,” which in theory would allow states to regulate until the federal agency is able to or chooses to do so. It is here where her work makes a real contribution.
Critics of Professor Roth’s thesis might argue that this state of affairs—the courts’ ability to block federal activity in this area that leaves no room for regulatory activity—is not a bug at all, but a feature of a system that prioritizes cautious regulatory interventions and fears an overbearing state. In this vein, a federal solution that is struck down may suggest the need for a better or more defensible federal solution—again, the fact that CMS did not try again may not be due to a complete regulatory clog going forward, but may be due to some other reason (i.e., a lack of political will). To be sure, it may also be difficult to blame the federal regulatory agencies for this undesirable situation, as they may not be able to foresee how their regulatory architecture may ultimately get eviscerated.
Still, Professor Roth’s contribution is a timely and thought-provoking contribution at a time when so much of the health law regulatory schema is up for debate. Preemption has been a particularly pernicious policy problem for years, and Roth’s coverage of the Medicare Advantage challenge is a clarion call for better policy. At the very least, her treatment of the topic is a reminder that policy design—no matter how defensible in the crucible of the halls of power—needs to be constantly attentive to its impact on the real world and on real people.
