The Other Big Health Care Case Before the Supreme Court

With all the hoopla surrounding the individual mandate case, the media and most commentators have often given short shrift to the other big health care case the Supreme Court is about to decide: the constitutionality of the Obamacare’s massive expansion of Medicaid. Constitutional law scholar David Oedel recently posted this interesting article on the subject, arguing that the case raises important issues and that the 26 states challenging the law have a stronger case than most pundits think. Oedel is serving as counsel for the state of Georgia, one of the plaintiffs in the case:

As we await the U.S. Supreme Court’s decision on health care reform, it makes sense to recall an under-reported part of the case. Five of six hours of the Supreme Court’s oral arguments in March about the constitutionality of health care reform focused on the individual mandate and got most of the media’s attention. The last hour was left for considering whether the tradition of federal/state cooperation in delivering Medicaid has, in the Affordable Care Act, morphed into unconstitutional coercion of the states…

Until that oral argument, the 26 plaintiff states faced widespread expert skepticism about the states’ constitutional challenge to Medicaid’s expansion. No court has ever before held that the federal government unconstitutionally coerced any state through conditional federal spending. The ACA, though, puts an unusually heavy federal clamp on state “partners” in Medicaid. If any rogue state were to fail to extend free health care to large portions of the lower-middle class, as ordered under the ACA, it could lose all its federal funding for Medicaid for the poor. That funding is by far the largest federal outlay to any state, and is critical to states being able to care for the poor.

Justice Stephen Breyer unexpectedly suggested at oral argument that a decision by the secretary of Health and Human Services to strip any noncompliant state of all Medicaid funding would be unreasonable, and just cause for litigation…

[Chief Justice] Roberts… interjected, “[S]o long as the Federal government has that power [to strip all funding], it seems to be a significant intrusion on the sovereign interests of the State,” even if the states may have experienced and accepted such intrusions before.

Riffing off the classic duress case of “your money or your life,” Roberts summarized the federal government’s position (embellished by [justices] Breyer and Kagan) as being that “there is no evidence that anyone has ever been shot,” rather than that a free choice exists. “You don’t have a choice,” declared the chief flatly. Justice Anthony Kennedy echoed Roberts’ view later, agreeing, “There’s no real choice. And Congress does not in effect allow for an opt-out.”

In short, the Court’s center seemed to lean toward the possibility that Medicaid’s expansion is being financially coerced….

I gave my own tentative thoughts on the Medicaid case in this post. I continue to believe that the Court is more likely to uphold than strike down this part of the law. As I explained in my earlier post, the line between “coercive” and “voluntary” conditional federal grants is murky at best. At the same time, for reasons outlined in that post, I do believe that the states should win. And Oedel is correct to point out that the Court’s swing-vote justices are giving their case more credence than most experts expected.

As Oedel recognizes, there is a small chance that this case will be rendered moot by a decision striking down the mandate and holding that all the rest of the health care bill goes down with it, because it cannot be severed. If that doesn’t happen, the Medicaid case is going to be an extremely important ruling no matter who wins; probably the most important Spending Clause case since the 1930s, or at least since South Dakota v. Dole in 1987.

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