By Fazal Khan, a law professor at the University of Georgia specializing in health law. Professor Khan has both law and medical degrees. This post is part of an ACSblog online symposium on oral argument in HHS v. Florida.
On Wednesday afternoon the Supreme Court heard oral arguments on whether the states can challenge the federal government’s expansion of Medicaid. Representing 26 states that oppose ACA in its entirety, former Solicitor General Paul Clement went first claiming that the federal government is “coercing” states to accept this unwanted expansion of Medicaid. As expected, the “liberal” justices pounced on Paul Clement’s central argument. Whereas Clement seemed very cocksure Tuesday arguing against the minimum coverage provision, on Wednesday he was not as deft in parrying the skeptical attacks from the justices, including Antonin Scalia and the chief justice.
Clement did regain his poise at the end during a strongly delivered (yet still substantively weak) rebuttal. Solicitor General Don Verrilli bounced back admirably after what can be fairly described as a difficult day on Tuesday. He was much more assertive and confident in pushing back against the “conservative” justices and possessed a strong command of the history of Medicaid and previous mandatory expansions of the program which really seem no different than the expansion at issue today.
Before recounting what happened during oral arguments, let’s review the law in question. Beginning in 2014, the Affordable Care Act (ACA) requires states participating in Medicaid to expand their coverage to individuals earning up to 133 percent of the federal poverty level. This change would cover an additional 17 million low-income Americans. Congress created Medicaid in 1965 to address medical access needs of low-income and disabled populations and federal and state governments jointly fund it. For the states, participation in Medicaid is voluntary, but all states choose to opt in because it provides a valuable medical safety net and a “boatload of federal money” in the words of Justice Elena Kagan. The states individually manage their own Medicaid programs and have some flexibility in how they design their plans. In order to receive their “boatload” of federal dollars, however, states have to conform to numerous mandatory federal guidelines and receive approval of their state plans from the Secretary of the Department of Health and Human Services (HHS). In other words, the federal government is using its spending power to make money available to the states, but only if the states meet certain conditions laid out in Medicaid statutes and HHS regulations.
Returning to the oral arguments, Justice Kagan challenged Clement right away on his coercion argument asking, “Why is a big gift from the Federal Government a matter of coercion . . . there’s no matching funds requirement, there are no extraneous conditions attached to it, it’s just a boatload of federal money for you to take and spend on poor people’s healthcare.” Kagan is referring to the fact that federal government is almost wholly funding the cost of this Medicaid expansion: the federal share is 100 percent in 2014 and drops to 90 percent by 2020. Clement’s response was that the level of federal government’s share in the expansion cost was irrelevant, because the states did not have the option to refuse these funds or the expanded coverage criteria without risking their overall participation in Medicaid. Justices Kagan and Sonia Sotomayor heaped skepticism on this response.
Justice Ruth Bader Ginsburg, mentally spry as ever, cornered Clement with this statement, “I mean, and this started quite many years ago, and Congress has added more people and given more benefits – and every time, the condition is, if you want the Medicaid program, this is the program, take it or leave it.” Clement tried to deflect Ginsburg’s point by stating that Congress could have made covering “newly eligible individuals totally voluntary” as it did with a 1972 expansion. But, Clement knew where Ginsburg was leading him. Obliquely referring to the mandatory expansion of Medicaid to cover infants and pregnant women during the Reagan administration (insert your own ironic comment here) Clement acknowledged, “There were other expansions that have taken place, such as the 1984 expansions, where they didn’t give states that option.” Later, Clement tried to distinguish the mandated 1984 expansions by arguing that federal Medicaid has become so much larger now than it was in 1984, growing from $21 billion to $250 billion. Chief Justice John Roberts seemed unconvinced by this argument stating, “They (states) should not be surprised that the Federal Government, having attached the – they tied the strings, they shouldn’t be surprised if the Federal Government isn’t going to start pulling them.” Clement also tried to push the argument that ACA’s Medicaid expansion was inextricably linked to the individual mandate. However, this descriptively dubious claim fell flat even for the conservative justices.
The conservative justices challenged Verrilli as to whether the statutory power granted to Secretary of HHS to cut off all federal Medicaid funds to any state that did not accept the ACA expansion constituted coercion. Verrilli cited the Dole case in which states were compelled to raise their drinking age to 21 in order to receive federal highway funds to demonstrate that constitutionally the federal government can nudge states with its spending power. He further responded that there was a political check to the Secretary of HHS acting unreasonably, but did not want to state as a matter of law that the Secretary did not have the power to completely cut off Medicaid funding to non-complying states. With both Clement and Verrilli, Justice Stephen Breyer took his administrative law hobby-horse on long rides, prompting this listener to pray that he would soon join Justice Clarence Thomas’s Marcel Marceau tribute (didn’t happen). Breyer’s point was that under the Administrative Procedure Act, reasonableness had to be read into any potential cut off of funds by the HHS, thus mitigating or eliminating any concerns about “coercion.” None of the other Justices picked up on this argument.
Final impressions -- because no lower court ruled that Medicaid expansion was unconstitutional, it does seem odd and troubling that the Supreme Court reached out to review this portion of ACA. While the conservative Justices seemed concern that the federal government might be intruding upon the sovereignty of the states with large spending programs like Medicaid that require states to accept certain conditions, Justices Roberts, Scalia, and Anthony Kennedy did not seem entirely convinced by Clement’s arguments. It is difficult to predict anything from oral arguments, especially with this Court. My preliminary analysis is that Medicaid expansion under ACA should be safe.
However, I think the broader question we all should be asking is why the Court is even calling into question the legality of this statute when similarly structured expansions have been occurring for decades? The high court cannot turn a deaf ear to critiques that it is coming dangerously close to subverting people’s faith in democracy. If the electorate’s choice of legislators and the executive is rendered meaningless by the partisan fiat of five unelected and unaccountable men in robes, how could this not lead to a massive legitimacy crisis? This could be a long, hot summer.