That’s the argument, in a nutshell: The Medicaid expansion is too good a deal for the states to turn down.
Not one of the lower court judges who considered the Republican officials’ argument bought it. Three of these judges voted to overturn the individual mandate provision. Yet they all rejected the states’ Medicaid quandary as, in Judge Roger Vinson’s words, a “hard political choice” altogether voluntary in constitutional terms. Moreover, no federal court has ever upheld a state government’s claim that it was unconstitutionally coerced into accepting strings attached to federal funds.
That the Supreme Court agreed to review an argument that received such short shrift from all of the lower federal courts should not be as surprising as it may seem. The justices may simply have decided that the court owes the 26 complaining states the courtesy of hearing them out. On the other hand, there may be more behind the court’s grant of the petition to review the states’ Medicaid claim. For some time, there has been among legal conservatives—expressed on occasion by some members of the Supreme Court—an undercurrent of resentment that, in the words of libertarian scholar Lynn Baker, “The biggest threat to state autonomy is, and has long been, Congress’ spending power.” The “spending power,” conferred by the constitutional clause empowering Congress to “lay and collect … taxes to pay the debts and provide for the … General Welfare of the United States,” has long been construed to authorize congressional spending for any purpose that serves the nation’s “general welfare” and to impose conditions on recipients.
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.
So could myriad other requirements, not all of a progressive nature—such as the requirement, upheld in 2006 by a 9-0 Supreme Court decision, that universities receiving federal funds afford military recruiters access to school facilities equal to that provided to other recruiters. The Republican states’ “coercion” theory could make all such guarantees unenforceable.
While such possibilities need to be seriously addressed by the Obama administration and its allies, it is by no means clear that the Supreme Court’s conservative bloc is inclined to grant the Republican states’ Medicaid expansion argument. For one thing, the states’ claim of unbearable financial damage is weak on the facts. The ACA provides that the federal government will pick up, through 2016, 100 percent of the costs of covering the new beneficiaries for which it prescribes Medicaid protection, a percentage which is gradually lowered until 2020, after which it is set permanently at 90 percent. More broadly, there are strong reasons to doubt that Chief Justice John Roberts and his colleagues will be eager to drive the judiciary, and the rest of the government, into the political morass of deciding all the messy, intractable controversies that will inevitably follow a ruling in the Republican states’ favor.
But even if the court rejects the Republican states’ Medicaid claim, the Supreme Court’s decision in this case will likely make new law on the boundaries of federal financial leverage over states—and, potentially, private recipients of federal dollars. This is a conversation we have not been having in the national dispute over states’ rights and broccoli. The ripple effects could be as unforeseeable as they will be consequential.