Affordable Care Act Arguments: The Medicaid Expansion

by Ice Miller LLP
Contact

On Wednesday, March 28, 2012, the Supreme Court of the United States (the Court) heard oral argument nearly two years after 26 states (collectively, the states) filed a lawsuit challenging the constitutionality of the Medicaid expansion found in the Patient Protection and Affordable Care Act of 2010 (the Act). The United States Circuit Court of Appeals for the Eleventh Circuit, the only appellate court to previously hear the challenge, ruled in favor of the federal government and upheld the Medicaid expansion. The Court's decision to not only grant certiorari but to schedule a full hour for oral argument surprised many legal scholars, leading popular media to dub it the sleeper issue of the case. In fact, the hearing lived up to expectations as the often lively arguments ran nearly 30 minutes past the time originally allotted by the Court.

The Medicaid Expansion

As one of several means of achieving near universal health care coverage in the U.S., one of the Act's key elements is an expansion to the existing Medicaid program, a federal-state cooperative medical assistance program. Medicaid has typically only covered certain categories of low-income groups, including children and pregnant women. The Act expanded Medicaid eligibility to all adults under 65 years of age with incomes up to 133 percent of the federal poverty level, which covers individuals earning approximately $15,000 annually or a family of four with a combined annual income slightly above $30,000. To help states offset the costs associated with the significant expansion, the Act provides that the federal government will fund the full cost of the Medicaid expansion through 2016, and beginning in 2017, the states will begin sharing the costs of the new covered population.

Offer You Can't Refuse or Politically Difficult State Choice?

The legal arguments are focused on a theory of economic coercion. The attorney for the states argued that the expansion unconstitutionally coerces state participation, as it simultaneously offers billions of dollars in federal funding to support the expansion, while conditioning the continued receipt of existing federal Medicaid funds on participation in the expansion. The federal government (the government) responded that placing conditions on the use of federal funds is precisely within Congress's spending power to set the terms and conditions on which federal funds may be appropriated.

The basic question the parties presented to the Court is whether the Act’s extension of Medicaid eligibility is a valid exercise of Congress’ authority under its spending power, or whether the Act is unconstitutionally coercive by leveraging existing Medicaid funding to force states to enact the expansion. The analysis of the limits of Congress' spending power focused on whether the Act's use of continued Medicaid participation as leverage for the expansion, and sheer size of federal share of the expansion, amounts to impermissible economic coercion of the states.

(I) Federal Conditions

Medicaid has become an essential element in nearly every state budget. States have become so dependent on these funds, that by conditioning all federal Medicaid dollars on implementation of the expansion, the states argued that participation is essentially mandatory. Somewhat surprisingly, Chief Justice Roberts remarked during the argument, that by becoming dependent on the program in the first place, "[the states] tied the strings, [and] they shouldn't be surprised if the federal government isn't going to start pulling them."

The government maintained that Congress has the authority under the spending clause to attach conditions to the receipt of federal funds. Further, the government argued that regardless of any conditions, by definition, no coercion may exist if the states are given a voluntary choice to participate in the program. The government pointed out that the take it or leave it approach is not novel, and in fact, it has been used in every major Medicaid expansion since 1984. In addition, the Secretary of Health and Human Services has always had the discretionary authority under the Medicaid statute to withhold federal funding from the states for Medicaid noncompliance. However, this was an issue that caused pause for many of the justices, including Justice Breyer, who pushed the government's attorney to explain the limitations of the secretary's authority to threaten or actually cut off all Medicaid funding for a specific unrelated act of non-compliance.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ice Miller LLP | Attorney Advertising

Written by:

Ice Miller LLP
Contact
more
less

Ice Miller LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!