KC Health Care Reform

• There might be a majority in support of striking down the expansion, but this is far from certain.
• The key question is whether the expansion of Medicaid is voluntary or not. The government argues that the States could always refuse and stop participating in Medicaid. The challengers argue that Medicaid funds are such a large part of State budgets that they don’t really have a choice.

Question: Does the federal government have the right to require States to expand the eligibility requirements for Medicaid?

The federal government has the power to attach strings to money given to the States. However, the federal government cannot use those strings to compel States to act. States must always have a choice to take the money and accept the conditions or decline to participate in the program. The key to this decision will be whether the States have a choice in this instance or if the expansion is “coercive” to the point where they have no choice but to accept.

Yes, the federal government can attach conditions to Medicaid funding and States can choose whether to participate.

• The Court has previously supported the right of the federal government to attach strings to federal money, as long as the States could choose to decline the money.
• States are not entitled to Medicaid money, and both sides agreed it would be legitimate for the federal government to decide to stop funding Medicaid entirely. If that is an acceptable use of power, than attaching strings to that money must be as well.
• Just because it would be difficult for a State to drop out of Medicaid, doesn’t make it impossible. States could theoretically choose to do so.
• States have not objected to previous Medicaid expansions.
• It is unfair to use the size of the expansion as a justification that States have no choice. It would not be reasonable to assert that the more money the federal government provides to States, the less power it has over how that money is spent.

No, the States have no practical method of choosing not to participate in Medicaid, so they have to accept the federal conditions.

• The Court has also found that there is a line across which attaching strings to federal grants stops being an acceptable use of power, but it didn’t specify where the line is.
• Because of the size of Medicaid programs and the amount of money involved, States don’t really have the option of not participating
• States that decline the strings attached to the money allocated to pay for the expansion can also lose all of their money to pay for previous Medicaid programs. This complicates the notion of “choice,” because States chose to participate in the original Medicaid program without knowing that they would be forced to expand the program 40 years later.
• The federal government needs to be reminded that their spending powers have limits, and this is a good case to do so.
• States are constrained in their ability to run their own health programs because there is a finite amount of tax revenue available. To the extent that the federal government collects more taxes, that decreases the States’ ability to increase taxes.

Conventional Wisdom

There may be five votes to prohibit the Medicaid expansion, but this is unclear. Some analysts have predicted Justice Kennedy will vote against the expansion, but his questions during the argument could point either way. Other Justices are expected to vote along ideological lines, with the conservatives opposed.