HealthLawProf Blog

Editor: Katharine Van Tassel
Case Western Reserve University School of Law

Thursday, June 28, 2012

Preliminary thoughts on today's decision splitting the proverbial baby

Also posted at Concurring Opinions:

Today, Chief Justice Roberts truly wore King Solomon’s crown.  He managed to split the issue with regard to both the “individual mandate” requiring all Americans to have health insurance coverage by 2014 as well as the expansion of Medicaid making all Americans up to 133% of the federal poverty level eligible for Medicaid coverage.  The Medicaid aspect of the decision is particularly confusing, given that one must count the votes twice to understand what has happened. 

First, seven of the justices (Roberts, Breyer, Kagan, with Roberts writing in the majority; Scalia, Kennedy, Thomas and Alito, with Scalia writing for the joint dissent) voted that the Medicaid expansion was unconstitutionally “coercive” under South Dakota v. Dole.  So, the first vote as to whether Congress has the power to require states to expand Medicaid was answered with a no; this is impermissibly coercive because the states have too much to lose if all of their Medicaid funds are at stake.  This is the first time the Court has ruled that federal spending legislation is impermissibly coercive.

But, the second question is whether that historic vote for impermissible coercion means the Medicaid expansion fails in its entirety.  Here, five justices voted to uphold the expansion but strike the remedy (removal of all Medicaid funding), rather than strike the expansion from the statute.  Justices Roberts, Breyer, Kagan, Ginsburg, and Sotomayor agreed that the proper response was to sever the Medicaid expansion so that if a state does not comply with the expansion of Medicaid eligibility, the state cannot lose all Medicaid funding.  Instead, it will only lose the funding attached to the expansion but will continue to receive existing Medicaid funding.  Justices Scalia, Kennedy, Thomas, and Alito would have invalidated the entire Medicaid expansion.  The ultimate result is that the Medicaid expansion was upheld, but states may opt out of it without jeopardizing all of their Medicaid funding under 42 U.S.C. 1396c. 

I was surprised by the number of votes in favor of impermissible coercion, but I also would be surprised if many, if any, states opt out; they will have great pressure from both physicians and hospitals to get their poorest residents into Medicaid.  Also, states that opt out of the Medicaid expansion would have to figure out how to fund the cost of the poorest uninsured, who often arrive in emergency departments with late-stage injuries and diseases and thus cost more to treat.  Of course, if a number of states opt out, then states that have fully-expanded Medicaid may see greater increases of their enrollment that ultimately could lead to political pressure to modify Medicaid eligibility in a different way (as we have seen at other points in Medicaid’s history).

It is hard to say what the future implications of the reaffirmed coercion doctrine will be.  The majority applied the coercion concept primarily through factual application rather than by expanding supporting theory (other than reiterating the “political accountability” notion from New York v. U.S).  Undoubtedly more challenges to spending legislation will follow, but this disposition does not tell us much more about coercion than we knew before 10:15 this morning.

More to come when I have time away from the reporters...  [NH]

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