The Court decision I’m really worried about

Unless you’ve been under a rock, you know that the Supreme Court is going to hear arguments and rule on the ACA next year. Most of the pieces I’ve read focus on the individual mandate. Granted, that’s where most of the arguments have been made. There’s a robust debate going on as to whether the mandate is constitutional.

To be honest, while I care about the outcomes of health care reform, I’ve little passion for defending the mandate. As I’ve said repeatedly, it’s a mechanism to prevent free riders. There are others. In a rational world, we’d just fix that part of the law.

But there is another aspect of the law also being challenged, and that one has me much more worried:

That brings us to what was, even for observers who have closely tracked these lawsuits, the real surprise today. The court also agreed to hear a fourth issue, also for an hour: the claim of the 26 Republican state officials that the ACA’s expansion of Medicaid coverage should be struck down, on the ground that it unconstitutionally “coerces” state governments. Potentially, the court’s disposition of this issue could cripple the federal government’s capacity to promote national policy goals more gravely than even a decision to overturn the ACA individual mandate, and thereby limit congressional authority to regulate interstate commerce.

The ACA prescribes that, beginning in 2014, Medicaid (which is administered by the states with a combination of federal and state funds) will cover all adults with incomes up to 133 percent of the federal poverty line. Currently, state Medicaid programs are required only to cover children and their parents or caretakers, adults with disabilities, and poor individuals over 65. The ACA itself doesn’t force the states to accept this incremental financial and administrative responsibility: They retain the option, available since Medicaid was first enacted in 1965, of refusing participation in the program, the funds that go along with it, and the conditions that go along with the funds.

Twenty-six states are trying to argue that the federal government can’t expand Medicaid’s coverage. They claim it’s an overstepping of federal authority to demand states do things and then pay for them.

Now, I don’t think that it’s likely that the court will agree. For one thing, no judge has yet found this point to be merit, while a number of them have found the mandate to be unconstitutional. It’s also true that states don’t have to expand Medicaid. They can refuse to comply.

But if they do, they lose out on all the federal money they get for Medicaid, and that’s a huge sum. So they’re arguing that they are being “coerced” to accept the regulations. They are saying that’s not right.

Honestly, I think this argument won’t fly. But I’ve been wrong before, and the implications of my being wrong here are too big to ignore:

If a majority of the court now leans toward imposing new curbs on Congress’ spending (as opposed to the much-maligned Commerce Clause) power, that could portend changes far more radical than limits on Congress’ regulatory authority to impose the individual mandate. The states’ attack on the ACA’s Medicaid expansion provisions would cripple Medicaid as well as other state-administered programs that are federally funded and supervised. Also vulnerable could be antidiscrimination guarantees prescribed by conditional funding programs such as Title VI of the Civil Rights Act and Title IX of the Education Amendments of 1972, the Age Discrimination Act, the Rehabilitation Act (banning discrimination against people with disabilities) and the Individuals With Disabilities Education Act.

If the Medicaid expansion were to be called into doubt, major environmental programs that set federal standards but delegate implementation responsibility to the states could wobble as well. Legal challenges and intensified political and bureaucratic resistance to all such programs would become the norm if state governments could get into court to challenge federal conditional funding offers on the ground that they are politically constrained even if voluntary on paper.

I can’t imagine that the Supreme Court would invite such chaos. But I’d be lying if I said I wasn’t just a little bit concerned.

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