Medicaid

by Jeremy Leaming

Chief Justice John Roberts saved the nation’s top court from going over a cliff, barely. While a majority of the justices found the Affordable Care Act constitutional, they did so largely on Congress’s power to “lay and collect” taxes.

The Court’s majority opinion, however, found that the minimum coverage provision was not a regulation of commerce. The majority opinion also held that Congress can expand Medicaid coverage, but that it “is not free” to “penalize states that choose not to participate in that new program by taking away their existing Medicaid funding."

ACS President Caroline Fredrickson praised the decision, saying:

The U.S. Constitution and the American people won an important victory before the nation’s high court today. The Supreme Court wisely resolved the health care case, despite all the political posturing on the right. Chief Justice Roberts’ majority opinion for the Supreme Court, upholding the Affordable Care Act’s integral ‘minimum coverage’ provision, has allowed for progress providing health care for tens of millions of Americans. It remains to be seen what the impact will be of Chief Justice Roberts’ understanding of the difference between ‘activity’ and ‘inactivity’ under the Commerce Clause.

The Obama administration argued that the ACA’s integral provision, the minimum coverage provision, which requires some Americans to purchase health care coverage starting in 2014 or pay penalty on their income tax filings, was valid under the Constitution’s commerce clause and the constitutional power of Congress to tax and spend.

By Rochelle Bobroff, Directing Attorney, Herbert Semmel Federal Rights Project, National Senior Citizens Law Center

The Supreme Court’s 5-4 decision in Douglas v. Independent Living Center, a case challenging California’s cuts in Medicaid reimbursement rates, can be summed up by the movie title: The Good, The Bad, and the Ugly.  The Good is the majority’s holding that refuses to deny court access to low-income Medicaid beneficiaries who had difficulty obtaining medications and other services when California slashed rates in violation of federal law.  The Bad is the narrowness of the court’s decision, which is limited to simple instructions to the lower court on remand.  And the Ugly is the dissent seeking to slam the courthouse doors on the poor.

The plot (or facts) in this case bears no resemblance to the movie.  When California slashed Medicaid provider rates to save money, ignoring the impact on beneficiary access to care, providers and beneficiaries sued the state.  Federal Medicaid law requires states to ensure adequate access to care.  So, the state laws cutting reimbursement rates conflicted with federal law.  The suit alleged that the state rate cut statute was “preempted” under the Supremacy Clause of the Constitution by the contrary federal law.  Businesses routinely bring preemption challenges to state laws that allegedly conflict with federal law. 

The state tried to get the case thrown out of court, arguing that beneficiaries could not bring a preemption suit to enforce the Medicaid statute.  But the Ninth Circuit, relying on over a century of Supreme Court cases permitting preemption cases to go forward, held that poor people have the same right to bring preemption challenges as businesses, and let the case proceed.  All other Circuits to consider whether preemption is available in these circumstances were in agreement.