Threats to Medicaid

Here at TIE and over at WaPo many are writing about the Medicaid and Medicare proposals by Paul Ryan. While that threat of legislation is an obvious focus during a Presidential campaign, we should also be aware of the threat of litigation to Medicaid.

Remember that the only aspect of ObamaCare that was successfully attacked by the massive two years of litigation was Medicaid, creating the Red State Option.  An unknown number of people (perhaps several million) will lose Medicaid coverage because of that decision.  The Court found an Act of Congress unconstitutionally coercive under the spending power/10th Amendment, for the first time in the history of the Republic.

The spending power/10th Amendment arguments that won 7 votes at the Supreme Court raise serious questions not just for Medicaid, but also for every other major federal-state spending program (education, justice, infrastructure, environmental).

We’ve just released a major working paper on these issues: Huberfeld N, Leonard EW, Outterson K.  Plunging into endless difficulties: Medicaid and coercion in the healthcare cases (SSRN Working Paper, August 13, 2012).*  Some of our salient conclusions:

  • The Court seriously misunderstood Medicaid, overemphasizing the discontinuities between the prior program and the ACA expansion.  It was a convenient distinction for Chief Justice Roberts to make, but it was unfounded in fact or history;
  • The Court created doctrine in this new 10th Amendment area in a haphazard fashion, giving almost no guidance for future cases.  Given the composition of the federal judiciary, we can expect a steady stream of cases striking down various programs under this new doctrine;
  • The Court got the “political accountability” argument exactly backwards:  the federal government wasn’t hiding behind the states in the ACA Medicaid expansion, but actually it was the states trying to blame the feds, despite a 100% match.  Ironically, after the case, the Red State Option puts real political pressure on states to make a politically accountable choice;
  • The Red State Option might be more than just a political compromise, it might be the required remedy in 10th Amendment cases going forward; and
  • The Roberts Court is restarting the Federalism Revolution left unfinished by the Rehnquist Court.


* At SSRN, which is the place most law working papers are posted.  Free downloads after registration.

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