Medicaid and the Supreme Court Case

The case challenging the Affordable Care Act has a lot in it to think about. Much of the public debate and the stories in the press are about the requirement that everyone have insurance – the individual responsibility requirement. But there also is a challenge to the Medicaid expansion.

Remember that Medicaid is to be the underpinning for the new national health care undertaking. Eligibility is set nationally at 133% of poverty and all adults below this income level are eligible (except undocumented and recent immigrants, of course). Above these Medicaid expansions there are subsidies for the purchase of insurance in exchanges up to 400% of the federal poverty level.

These expansions are mostly paid for by the federal government, but some states have challenged the requirement that they serve these populations, contending that the Federal Government does not have the right to require them to serve these new populations as a condition of participation in the Medicaid program.

This is one of the issues that is being debated before the Supreme Court next week. Here below is a brief rundown on the case.

There are several different suits against the ACA that have been consolidated into one case that will have four parts:

1. A technical challenge contending that the case cannot be brought at all because it involves a tax issue and there is clear law prohibiting legal action against a tax that has not yet been imposed. If the individual mandate is a tax, then this issue might have merit, but there is no agreement that it is a tax. Neither the ACA opponents nor the Administration are making this argument so outside counsel has been brought in by the Court to argue the issue.

2. The challenge to the individual mandate is the second issue in the case. This is perhaps the most hot button political issue with legal scholars expecting the mandate to be upheld and political analysts uncertain about what this very ideological court will do with the issue.

3. A challenge to the mandated increase in Medicaid eligibility that opponents claim is an unconstitutional imposition by the federal government on the states. If the Court rules that the Congress cannot condition the Medicaid program by requiring states to serve the populations that become eligible for services (all adults under 133% of the FPL), then there will be clear challenges to other federal programs that condition the receipt of appropriated money – transportation, school funding, TANF, infrastructure appropriations, unemployment insurance, etc. The lawyers who have been briefing on this are puzzled about why the Court took this issue up in this case and are worried that there may be some hidden agenda that could harm the Medicaid program and a whole lot else to boot.

4. Severability. This is the issue of whether or not the whole ACA falls if a portion of it is declared unconstitutional. The lawyers usually discuss this in terms of the individual mandate – if the mandate is tossed does not the whole act have to go because the economics no longer work. The non-lawyer in me wonders whether or not this is the “hidden agenda” associated with Medicaid – that is, if both the individual mandate and the Medicaid expansion are declared unconstitutional then surely the whole ACA must go, whereas if only one or the other of these policies is invalidated then the rest of the ACA should stand.

What happens if the Court upholds other pieces of the ACA are upheld but declares that the Medicaid expansion is unconstitutional? This is a big unknown. At the very least it will have ramifications for hundreds of federal programs that require states to meet federal requirements if they are to get the funding. This would be a fundamental shift in power to the states and would probably undermine efforts ranging from infrastructure development to civil rights.


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