Is the sky falling? According to Florida et al., which filed their brief regarding PPACA’s Medicaid expansion today, the answer is a resounding yes. In many respects, this brief rehashes the coercion arguments made in the district court and Eleventh Circuit. The states continue to argue that they cannot afford the Medicaid expansion that will occur in 2014 (which I discussed on this blog here, here, and here), even though the federal government will pay 100% of the cost initially; and, they cannot afford not to participate in Medicaid because the costs of their medical welfare populations would be too high. Thus, the states claim to be coerced into accepting this “onerous” new condition on federal funds. Again, these arguments are not new.
One aspect of the brief that was new was the inclusion of the severability arguments through describing the Medicaid expansion within the context of the universal insurance aspirations of PPACA (see especially fn. 18). The states essentially contend that the minimum coverage requirement (“individual mandate”) gives impoverished Americans no option but to be in Medicaid, which in turn makes it so that the states cannot opt out of Medicaid. The states further assert that this was Congress’s plan – to coerce the states by giving the poor no other options for obtaining minimum insurance coverage. The fallacious assumptions underlying this argument are too numerous to unpack at this late hour, but at least two thoughts can start the job: first, New York v. U.S. does not require the federal government to offer alternatives to conditional spending programs (unlike, say, when it exercises commerce authority – the insurance exchanges in PPACA, which are a point of contrast in the brief, are an exercise of Commerce Clause authority, and states can either create them with some federal funding or reject them and the federal government will create the exchanges in the states that choose not to act — all of this fits neatly within the New York architecture). Second, suffice it to say that the impoverished are not seeking private insurance alternatives to Medicaid.
Medicaid’s history is skewed by the brief more greatly than it was at lower court levels. For example, the brief ignores the fact that Medicaid has always contained mandatory elements; these mandatory elements were one of the major defining features of the program as it was amended from Kerr-Mills, its predecessor program. The brief also misrepresents the existence of mandatory eligibility and coverage standards and how they serve the aspirations of the program. Likewise, the brief either misunderstands or misrepresents the minimum essential coverage requirement, which is actually more flexible for states than the mandatory coverage provisions for other Medicaid populations. Additionally, the brief appears to misunderstand the statutory clarification that Medicaid provides both care and service (Congress here was responding to lower federal courts that had misconstrued certain language in the Medicaid Act).
Also, decisions such as Arlington, Dole, and Pennhurst that have required clear notice of conditions on spending are cited in the brief to support the states’ position that they have not voluntarily agreed to this condition on spending. Before this point, the states have not argued that any other Dole element was violated, but the states now seem to indicate that these conditions were not unambiguous and thus the ‘contract’ with the federal government is unconstitutional. In addition, the states offer a limiting principle that adopting their view of the coercion theory does not threaten other federal spending programs because Medicaid is by far the largest federal spending program (echoes of the federal government’s argument that nothing else is like healthcare).
Bottom line, the states want the Court to revive Butler and to expand the theory of coercion that the Court merely acknowledged in Dole and Steward Machine by relying heavily on Justice Kennedy’s concurrences and dissents that have expressed an interest in such an expansion. The question is whether a majority of the Court is interested in a new limitation on Congress’s power to spend.