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Monday, July 02, 2012


The Medicaid Mystery
By Charles Lane

Everyone's focused on the individual mandate, but let's talk Medicaid. The Supreme Court ruled that the Affordable Care Act unconstitutionally coerced the states into signing up for a Medicaid expansion, and the federal money that comes with it, by threatening them with a total cutoff of Medicaid funds if they didn't accept. The court remedied this by saying that the Department of Health and Human Services could not reduce the states' existing Medicaid funding, only the additional money they would have gotten.

This outcome gives the red states that brought the lawsuit brand-new leverage. It will be a lot easier for them to tell the administration where it can put its Medicaid expansion. True, the states would forfeit huge dollars in the short run — but don't forget that GOP Govs. Rick Scott in Florida, Scott Walker in Wisconsin and John Kasich in Ohio turned down big grants to build high-speed rail because of the risk of future liabilities that the feds would not cover.

In short, one of the main ways the Affordable Care Act achieved universal coverage, by expanding Medicaid, may have been significantly weakened.

What's even more astonishing is that the court reached this result with the support of its liberal justices. In fact, seven justices said that the Medicaid expansion was unconstitutionally coercive: Chief Justice John G. Roberts Jr. enjoyed the backing not only of the other four conservative Republican appointees but also liberals Stephen G. Breyer and Elena Kagan.

Pretty impressive for a contention that garnered no takers in the many lower courts that considered the matter.

The four conservatives — Justices Antonin Scalia, Anthony M. Kennedy, Clarence Thomas and Samuel A. Alito Jr. — would have solved the coercion problem by striking down the whole law. That would have left Roberts with just three votes — his, Breyer and Kagan — but then two more liberals, Ruth Bader Ginsburg and Sonia Sotomayor, acceded to the remedy, in spite of their view that the Medicaid expansion was perfectly constitutional.

Why? Ginsburg explained, in essence, that half a loaf was better than none; this was the only way to "conserve" Congress' "dominant objective," even partially. Thus did the first Supreme Court ruling ever to hold a federal-state spending program unconstitutionally coercive — a ruling that inevitably opens the door to more such challenges to federal programs in the future — receive a bipartisan imprimatur.

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