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Editor: Katharine Van Tassel
Akron Univ. School of Law

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Thursday, July 5, 2012

Bad Medicaid facts make bad spending precedent

Cross-posted at Concurring Opinions:

The Healthcare Cases contain a major factual fallacy that Medicaid is somehow now two programs, old Medicaid and new Medicaid.  Dismayingly, Chief Justice Roberts persuaded Justices Breyer and Kagan to sign on to this ridiculous description of Medicaid.  And the dissent bought it too.  As I’ve said before, healthcare is an imperfect vehicle for constitutional change.  Here’s why that description is both wrong and potentially dangerous.

The Roberts plurality on Medicaid and the joint dissent both describe Medicaid as if it had been structured to cover certain categories of the poor as a way to protect states.  History tells us this characterization is quite far from the truth.  As I have described elsewhere, in 1965, Medicaid was limited to covering the unfortunately named “deserving poor” because the states had only provided benefits to the deserving poor.  That “choice” was not really a choice at all, but rather the result of path dependence on the part of both the states and the federal government.  Prior to the New Deal, states were responsible for welfare-type programs, and welfare programs only extended help to certain poor who were deemed blameless in their poverty.  This notion of blamelessness was a direct descendent of the Elizabethan Poor Laws, which found certain poor liable for their poverty and allowed assistance for only certain “deserving poor” – and those poor happened to be widows, orphans, disabled, and elderly.  Sound familiar?  It should, as these are essentially the same categories that were covered in 1965, when Kerr-Mills became Medicaid, a more centralized and clearly federal program. 

Since 1965, the federal government has slowly added to Medicaid eligibility, thereby also slowly eroding some of the old notions regarding the deserving poor.  And, the states have always had the option of extending Medicaid to poor beyond the old categories, an option that every state has exercised to some degree.  For example, all states provide some coverage to parents of needy children, not just pregnant women, and some states have covered childless, non-disabled adults under age 65.  Thus, extending eligibility and eliminating the categorical characterizations of eligibility is not unprecedented.  And again, that distinction lies in biases about who should receive governmental assistance that date to the colonial period, not a deliberate choice to protect states.  [more after the jump] 

So, the Medicaid expansion is not “new” Medicaid or “Medicaid 2.0″.  It is a modernization of the Medicaid program that should have occurred years ago, with or without the expansion of health insurance to all Americans.  (By the way, the essential health benefits package is also not new, it was introduced as an element of flexibility for states in the Deficit Reduction Act of 2005.  Ironic that the states now point to it as coercion, when it was originally written to benefit them and provide them more flexibility.)

This characterization of “new Medicaid” is dangerous because it essentially tells the federal government that it cannot set the parameters of its conditional funding programs.  The federal government has always created the baselines of Medicaid, one of which is eligibility, allowing states flexibility to increase coverage but never decrease it.  The Roberts plurality seems to miss that eligibility for a federal program is a key element of “preserv[ing] control over the use of federal funds.” [slip at 49]  If eligibility for federal funding is beyond the federal government’s control, then this case truly does open the floodgates for coercion litigation.  This will be another National League of Cities v. Usery, or New York v. U.S., or Lopez… pick your judicially-enforced federalism precedent. 

 The danger is not only that such a flood may affect wide-ranging cooperative federalism programs such as education, welfare, environmental protection, and highway infrastructure, but also that we still don’t know what coercion is.  The Roberts plurality refused to define it, and the joint dissent did too, providing nomenclature - the “anti-coercion rule” – but not articulating any kind of test.  [slip at 37]  The dissent’s formula was simply: “if States really have no choice other than to accept the package, the offer is coercive, and the conditions cannot be sustained under the spending power.”  [slip at 35]  We hear echoes of Justice Stewart’s famous “I know it when I see it” line (and we know how clearly the Court has resolved obscenity cases).  Perhaps the dissent acknowledged the ambiguity in its invitation for coercion litigation by stating (at least twice) that determining the difference between influence and coercion is “difficult.” 

So, the bad facts leave us with a deeply undertheorized expansion of the coercion concept.  Despite the lack of a rule, let alone a viable theory, coercion litigation is sure to follow this decision.

[NH]

 

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