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    Health Reform and the Supreme Court Decision – Part 3

    Posted by Cassie Peterson on Jun 11, 2012 8:11:46 AM

    Jones & Bartlett Learning Author and Health Policy Expert Joel Teitelbaum weighs in on the Health Reform Case Before the Supreme Court.

    During the final week of March, the United States Supreme Court engaged in an historic debate about the meaning and constitutionality of the Patient Protection and Affordable Care Act (known as Affordable Care Act, or ACA).  The culmination of some 30 legal challenges to the ACA, the Supreme Court heard oral arguments on a series of legal issues: (1) whether the ACA’s individual coverage requirement is a tax for purposes of the Anti-Injunction Act; (2) whether Congress has the power under Article I of the Constitution to enact the minimum coverage requirement; (3) whether, if the coverage requirement is found unconstitutional, it is “severable” from the remainder of the ACA; and (4) whether the ACA’s requirement that states expand Medicaid eligibility or risk losing federal funds is unduly coercive in violation of the Tenth Amendment.

    In this blog post, the third of a four-part series, I focus on question four.  The first post discussed question one, the second post covered questions two and three, and the fourth post will describe the Court’s ultimate ruling in the case, which could come any day now and will certainly be handed down before the end of the month.

    Whether the ACA’s requirement that states expand Medicaid eligibility is unconstitutionally coercive is an issue that not many Court-watchers thought would end up before the Court – no appellate court bought the coercion argument as the ACA litigation wound its way to the Supreme Court.  Once the Justices accepted the question, however, many observers agreed that the coercion question was potentially the most far-reaching, given the possible implications for many other federal grants that contribute mightily to the country’s social welfare, education, transportation, and other systems.  Indeed, if the Court invalidates the Medicaid expansion on coercion grounds, it calls into question nothing less than Congress’s ability to place conditions on the states’ acceptance of federal funds.

    At the heart of the coercion issue is the ACA’s expansion of Medicaid to cover all American adults under age 65 with incomes below 133 percent of the federal poverty level (FPL).  Notably, the ACA provides that the federal government will cover all of the costs associated with this expansion in 2014, 2015, and 2016.  After 2016, states are required to contribute to the expansion’s cost, but in no case is the state burden more than 10 percent.

    Key to the ACA’s Medicaid expansion is a requirement that states must expand to 133 percent of FPL in order to participate in the rest of the Medicaid program.  This, the states argue in challenging the expansion, is unconstitutional.  They claim that the fact that their continued ability to draw down any federal Medicaid funding is conditioned on the requirement to expand eligibility to 133% FPL is impermissibly coercive.  Put simply, the states are saying that by conditioning all Medicaid funding on acceptance of the ACA expansion, the federal government is forcing states to participate in a federal program, which is in fact unlawful under principles of federalism and state sovereignty.

    Yet Medicaid has always been, and remains under the ACA, underpinned by a voluntary agreement between the federal and state governments to jointly administer a medical assistance program for poor and underserved Americans.  Although all states participate in the program, they have always done so at their discretion, and remain free to opt out any time they choose.  Congress has altered and expanded Medicaid many times since the program’s inception in 1965, and no coercion argument has ever been lodged (in fact, no federal program has ever been ruled unconstitutional under the theory that a state has been compelled to participate in it).  Nothing in the ACA alters any of this; it simply requires that for states that choose to remain in the federal-state partnership that is Medicaid, the program must be extended to 133 percent of FPL.  This was the federal government’s position at oral arguments back in March: if some states no longer like the terms of the Medicaid deal, they are free to walk away.  The fact that doing so may be politically difficult to explain to some voters is of no matter; states make hard political and fiscal decisions with regularity.

    Across the range of issues debated at oral arguments, the coercion argument, while potentially the most far-reaching, also seemed the most far-fetched.  In just a matter of days, we will know whether at least a majority of the Court agrees.

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    Joel Teitelbaum, JD, LLM is an Associate Professor and the Vice Chair of Academic Affairs in the Department of Health Policy at the George Washington University School of Public Health and Health Services. He also serves as Managing Director of the School’s Hirsh Health Law and Policy Program. Along with co-author Sara Wilensky, Professor Teitelbaum is the author of Essentials of Health Policy and Law from Jones & Bartlett Learning, which recently published in a Second Edition. (Qualified instructors are invited to request review copies here.  Professors Teitelbaum and Wilensky are also the authors of an eChapter on Health Reform which may be bundled with any Jones & Bartlett Learning text at no additional cost.

    Topics: Commerce Clause, Constitution, Affordable Care Act (ACA), Author, Congress, health administration, Medicaid, Patient Protection and Affordable Care Act, Supreme Court, Tenth Amendment, Supreme Court Health Reform Decision

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