Day Three Part Two — Medicaid


The final argument of the Court’s three-day marathon ACA argument was about the Act’s Medicaid expansion.  And once again, the argument unfolded in a way that surprised many Court observers:  Most had predicted that the Court would easily reject the challengers’ argument that the Medicaid expansion is unconstitutional.  But in fact the Court’s conservatives had very tough questions for the government, and at the end of the day the outcome is no sure thing.

Background

The ACA expands Medicaid in various ways, telling the states to cover categories of people that they never had to cover before.  The federal government picks up some 90% of the tab for that expansion, at least in the short term.  And the expansion is mandatory for states that want to remain in Medicaid; if states refuse the new terms, the federal agency that oversees Medicaid has the discretion to eject them from the program and stop the flow of federal dollars.

About half the states have argued that the expansion is unconstitutional.  Their argument stems from a constitutional theory sometimes called the “coercion doctrine.”  In simple terms, it works like this:  Congress has the power to spend money by giving it to the states, and when Congress does so, it has the power to put conditions on that spending.  It can tell the states, for example, “you can have $100 million to rebuild federal highways, but only if you employ a sufficient percentage of minority highway workers.”  The Court lets Congress place these kinds of conditions on spending — and even lets Congress accomplish things through spending conditions that Congress couldn’t legislate directly — on the theory that the states’ actions are voluntary; if they wanted to, they could refuse the condition and turn down the federal money.  But the Court has suggested that if the federal offer ever became so massive that it was impossible to refuse — i.e., if it ever became “coercive” — then the spending condition might be unconstitutional.  That would be the case because Congress can’t directly command the states to implement programs.

The Court, however, has never actually said that the “coercion doctrine” exists; it has only suggested it.  And a coercion doctrine could pose big problems for Congress, limiting its discretion to make changes to existing federal programs.  Thus two big questions were before the Court today:  Is the Medicaid expansion coercive?  And if so, does that even matter, or should the supposed “coercion doctrine” be rejected before it even takes root?

Today’s Argument

The challengers.  Paul Clement once again argued first on behalf of the law’s challengers.  He argued that the Medicaid expansion is unconstitutional because states have no real choice whether to participate.  That is so, he said, because Medicaid provides a large percentage of many states’ health care budgets, and they’ve been relying on the program for decades.  As a result, he argued, the choice Congress offered — accept the program expansion or lose all current Medicaid funds — is no choice at all.

Justices Kagan, Sotomayor, and Ginsburg quickly attacked that position.  They pointed out that under Clement’s theory, Medicaid arguably has been unconstitutional for years.  (That is so because Congress has changed the Medicaid program in the past and made the changes mandatory for continued program participation.)  They pointed out that states arguably do have a choice, even when massive federal funding is at stake; if they really don’t like the conditions, they should give up the funding and explain their position to the state’s voters.  And they observed that it’s difficult for a court to even judge when coercion occurs.  What if — as in this case — only s0me states think they’re being coerced?  As Justice Ginsburg said, “there are other states that like this expansion” and “are very glad to have it.”

Justice Kagan was particularly aggressive, posing a number of hypothetical questions to Clement and looking exasperated by his answers.  At one point Clement tried to answer one of her questions and she quickly interrupted:  “Mr. Clement, Mr. Clement.  How could that possibly be?”

The government.  Solicitor General Donald Verrilli, however, came under fire of his own when he stood up second.  He said the states “are asking the Court to do something unprecedented” by striking down the Medicaid expansion.  But Chief Justice Roberts and Justices Scalia, Kennedy, and Alito all quickly expressed concern about whether states really have a choice to reject the new Medicaid conditions, given that they would lose billions in federal funds.  Justices Scalia compared the situation to a thief saying, “your money or your life.”  And when Verrilli responded that the federal government has discretion, and in the past hasn’t ever stripped all Medicaid funds away from non-compliant states, Chief Justice Roberts responded that that was because the states eventually caved in:  “Well, but that’s just saying that when [the thief says] ‘your money or your life,’ you say well, there is no evidence that anyone has ever been shot. . . . It’s because you give up your wallet.”  Later, Justice Kennedy put his position in stark terms:  “There’s no real — there’s no realistic choice. There’s no real choice.  And Congress does not in effect allow for an . . . opt out.  We just know that.”

Analysis


The Court’s conservatives strongly suggested — and in some cases said right out — that they think the Medicaid amendments coerce the states.  But that does not mean they will vote to strike down the law.  As I mentioned at the outset, the second question is whether there should be a coercion doctrine at all — and on that question, the conservatives offered few clues as to their position.

 

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