Are Challenges To ACA’s Medicaid Reforms Founded In Constitutional Principles?

Jim Hufford

First published 6/15/11 on Organon

Read this in Belorussian here.

At oral arguments over the health reform law last week, the Eleventh Circuit panel showed a surprising amount of interest in the other constitutional challenge to the Affordable Care Act (ACA)—the states’ claim that the ACA’s Medicaid provisions are unconstitutionally coercive, effectively commandeering state governments into doing the federal government’s bidding. Brad Joondeph reviews the arguments presented by former Solicitor General Paul Clement on behalf of the states.

First there’s an argument from “sheer volume”: the enormity of federal Medicaid funding unconstitutionally tips the balance of federalism in favor of the feds. The difficulty with this argument is that, if the sheer volume of Medicaid makes new conditions on federal spending unconstitutionally coercive, then every new amendment that has increased states’ program costs in the past several decades must also have been unconstitutional.

Then there’s an argument from the disproportionality of new conditions: a state’s noncompliance with the new conditions jeopardizes all its federal funds, not just funds newly dedicated in the ACA. Same problem as before. If new conditions on existing federal funding were unconstitutionally coercive, then you’d have to explain why the Supreme Court reached the exact opposite conclusion in South Dakota v. Dole.

And then there’s a third argument that Joondeph sums up like this:

[T]he ACA (a) imposes an individual mandate on all Americans to acquire health coverage, (b) applies that mandate to everyone, including Americans below the poverty line, but (c) provides no subsidy for those persons falling below the poverty level (though it does provide subsidies for those between 133% and 400% of poverty). Thus, the ACA on its face assumes that every state will comply with the Act’s Medicaid conditions, for this is the only way envisioned by the Act for indigent Americans to satisfy the mandate.

So Congress imposed the mandate assuming that the states will comply with new Medicaid conditions, and therefore . . . the ACA is coercive? Hmmm. Well, the first problem with this argument is that it is not an argument—it doesn’t connect premises to a conclusion. But even if we spot them a major premise to be articulated later, there are two other, fatal problems with it: it confuses states with the people who live in them; and it does not take into account that the ACA provides exemptions to the mandate for those who cannot afford qualifying coverage.

If State XX decided to quit Medicaid rather than accept new conditions on federal funds, the formerly Medicaid-eligible population of XX would likely be less than enthused, mandate or no. But here’s the thing. Even if they were subject to the mandate, the fact that Congress had imposed that burden on them would have precisely nothing to do with the state and its former Medicaid program. In no sense does the individual mandate place demands on the states in their sovereign capacity. It is touching that these states would equate a mandate upon its less fortunate citizens as a mandate upon the sovereign state itself. Touching, but false. And irrelevant. The mandate has nothing to do with Medicaid and nothing to do with the states (except in the minor sense that state officials in the Exchanges might certify compliance with the mandate).

What’s more, if Medicaid coverage were not available, the mandate would not apply to many people with incomes under 133% of the poverty level (FPL). This gets pretty complicated, so I’m going to save the details for another post. Suffice it to say that the mandate may not apply to people earning under 100% FPL, and people between 100% FPL and 133% FPL will either have access to subsidies or will be exempt due to the ACA’s provision excusing anyone for whom the cost of the cheapest qualifying plan would be more than 8% of their income.

In fairness, it is probably best not to think of these as separate arguments. Each fails on its own, but together they loosely approximate plausibility. As Joondeph wrote in an earlier post:

Perhaps, as the states’ brief seems to suggest, it is not any one of these factors in isolation, but the three in combination, in the context of a singularly enormous federal spending program, which renders the ACA’s Medicaid expansion unconstitutional. This is not implausible. But it is also hard to figure out how the Court could ever articulate a rule or principle of constitutional law that actually operationalizes the idea. Even if one could articulate it, the implications could be extremely destabilizing for constitutional law, and in an area that really matters (and matters on a regular, ongoing basis).

As I’ve written before, the Supreme Court’s precedents have left the door open to this kind of challenge, but they don’t illuminate a distinct line between what is and isn’t coercion. Probably because there isn’t one.

Jim Hufford is an attorney living in the San Francisco Bay area. He writes at Organon.

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