Healthcare Showdown at the Supreme Court (Part 3)

With Obamacare heading to the Supreme Court on March 26, Legal Lad explores the 4 issues facing the highest court in the land. Today he tackles "expansion of Medicaid"

Adam Freedman
2-minute read

This is the third in my series of posts about the major issues at stake in next week’s arguments at the Supreme Court regarding the constitutionality of the new federal health care law, known as the Affordable Care Act (ACA).

In my first two posts, I discussed whether the “individual mandate” is constitutional and, if not, whether the rest of ACA can survive without it. In this post, I preview the controversy over the law’s expansion of Medicaid.

Medicaid is the health insurance program for the poor.  Although it is a federal program and partially funded by the federal government, it is administered by the States, and partly funded by them, too.  Under current law, States must extend Medicaid to certain categories of needy individuals, but beyond that, they have flexibility to determine the scope of coverage.  When they expand Medicaid coverage, they often qualify for additional federal funds.  

Under ACA, states will be required to offer Medicaid to all individuals under 65 with incomes up to 133% of the poverty level.  According to some commentators, this new mandate will require a massive expansion of Medicaid rolls.  States that refuse to participate in this expansion of Medicaid risk losing all federal Medicaid funds – for most states, more than a billion dollars a year.

The constitutional question is whether the Medicaid expansion represents improper “coercion” of the states.  On two occasions – in 1937 and 1987 – the Supreme Court stated that the federal government cannot coerce states into adopting particular policies, because such coercion would violate the basic principles of federalism inherent in the Constitution.  The problem is, the Court was speaking hypothetically on both occasions (in both cases, the Court held that there was no coercion), and the Court did not give clear guidance about when federal “pressure” turns into “coercion.”  Whether the federal government has finally crossed that line is the billion dollar question.   

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