Republican governors claim Obamacare is a violation of states’ rights.

Why the Last Hour of the Supreme Court Argument over Obamacare Matters Most

Why the Last Hour of the Supreme Court Argument over Obamacare Matters Most

The law, lawyers, and the court.
March 27 2012 11:30 AM

The Temptations of the Court

Why the last hour of the Supreme Court argument over Obamacare matters most.

United States Supreme Court Chief Justice John Roberts prepares to take the stage.
Will Chief Justice John Roberts and the court's other conservatives buy the argument by some states that the Medicaid expansion is "coercion"?

Chip Somodevilla/Getty Images.

By the third day of Supreme Court arguments over the Affordable Care Act, people may be inclined to tune out. They shouldn’t. The final hour may be of far greater consequence than anything else the court hears this week. On Wednesday afternoon, the justices will vet a claim that targets the part of the new law that expands the Medicaid program. The Republican governors and attorneys general bringing the case against the health care law assert that the choice given states by the federal government—either accept coverage of approximately 16 million newly eligible beneficiaries or withdraw from Medicaid and lose all existing federal Medicaid funds—is “coercion.” Hence, they argue that with this provision, the federal government is unconstitutionally undermining state autonomy.

That is no small claim. Former U.S. Solicitor General Paul Clement will be making a states’ right argument that is by far the most ambitious line of attack presented by the challengers to Obamacare. If accepted, this coercion theory could unravel existing federal authority and topple long-standing programs on a truly massive scale. Laws in the crosshairs would include: conditions on federal aid to education, such as No Child Left Behind (either the original George W. Bush or the modified Obama version); protections for persons with disabilities, like wheelchair access facilities on urban buses, subways, and sidewalks; myriad guarantees against racial, ethnic, gender, age, religious, and other forms of discrimination by state and local recipients of federal funds; guarantees of access to campus facilities for military recruiters, even anti-abortion restrictions. Indeed, this specter is so large it provoked a stinging (and unreported) defection from one of the senior most Republican leaders.  On Dec. 15, 2011, Senate finance committee baron Charles Grassley of Iowa took to the Senate floor to warn, “A Supreme Court ruling in favor of the states will necessarily bring into question every agreement between the federal government and the states where the federal government conditions 100 percent of the federal funds on states meeting requirements that are determined in D.C.” 

The Republican challengers say these fears are overwrought, and they disavow any goal of overturning so many federal programs. On the contrary, their precise “ask” is that the court freeze Medicaid. They want to veto the new modifications but maintain status quo ante federal-funding levels. They are entitled thus to have their cake and eat it too, they claim, and turn Medicaid into a constitutionally mandated block grant, because the new Medicaid amendments are uniquely oppressive—as they say, “unprecedented coercion.” Mimicking political attack-ad hyperbole, their brief analogizes the law to “when a thief produces a loaded gun and demands, ‘your money or your life.’ ”  

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To back up this scary rhetoric, it’s necessary for opponents of the law to build it up as some unprecedented invasion of states’ independence.  At best, these arguments are misleading, if not just plain wrong. For example, the challengers assert that the Medicaid expansion is a uniquely “onerous” imposition on the states. That gets the facts exactly backward. The statute actually provides that the federal government will shoulder 100 percent of the costs of adding newly eligible persons to Medicaid rolls, through 2016, dropping to a permanent level of 90 percent in 2020. That is a vast improvement from the average 57 percent in burden-sharing today. Moreover, several studies show that the new law will lead to a net benefit of $100 billion for state budgets through 2019.    

Another dubious complaint is that, unlike past revisions to Medicaid, the health care law is an unprecedented ultimatum: Either accept it or lose all federal Medicaid funds. It would be a good argument, if it were remotely true. In fact, Congress has often amended Medicaid on precisely the same “all-or-nothing” basis. That’s nothing new, and this is no mere debaters’ point. If the latest expansion is invalid because it ties new conditions to the continuation of funding, then all past expansions—in essence the entire existing Medicaid program—is vulnerable.

Republican opponents to the Affordable Care Act have labeled its Medicaid provisions a subterfuge, contrived to “commandeer” state governments to help pay for the law’s implementation by driving Medicaid-eligible uninsured persons to enroll in Medicaid. But that is not how the law reads. In fact, it offers a variety of exemptions that ensure that anyone poor enough to qualify for Medicaid will be excluded from the law’s penalties for noncompliance with the mandate.  

 Finally, the Republican officials argue that since federal Medicaid funds account for approximately 10 percent of state government budgets, none of the states could realistically have dropped the program. But this complaint confuses “coercion” with a “hard political choice,” as Florida Federal District Judge Roger Vinson, a Ronald Reagan appointee, tartly ruled a year ago. Were a state to reject Medicaid with the new conditions, their legislators would then have to decide how much of the forgone federal funds to replace through tax hikes, program cuts, or whether to negotiate some other arrangement with federal authorities. The resulting political give-and-take is just how the balance between state and federal government is supposed to be struck. 

To date, except for libertarian-leaning Justice Clarence Thomas, the Supreme Court’s conservatives haven’t had much appetite for scrapping long-established broad definitions of Congress’ tax-and-spend power. However, they do have their sympathies. On scattered occasions, conservative justices have worried that, as Justice Anthony Kennedy noted in a 1999 dissent, Congress’ fiscal leverage, “If wielded without concern for the federal balance, has the potential to obliterate distinctions between national and local spheres ...”  Hoping to stoke such anxieties, Clement asserts that, if the court misses the opportunity presented by this take-it-or-leave-it revamp of the nation’s largest spending clause program, there may never again come a chance to check Congress’ financial clout over the states.  However inflated, such pleas could resonate with Kennedy, as well as with Justice Samuel Alito, who frequently sympathizes with state resistance to federally imposed financial obligations. And Justice Antonin Scalia could be attracted by the Republicans’ argument that the Medicaid expansion constitutes de facto “commandeering” of the states, to help implement the individual mandate.  Justice Scalia elaborated this “commandeering” theory in a 1997 case that struck down a Brady Act requirement that state and local police perform background checks on gun purchasers. 

Then again, the court will probably not relish the opportunity to risk disruption at all levels of government. No matter how much Clement and the challengers try to downplay it, the court’s conservatives know how much hinges on this last hour of argument. Let’s hope they rise above the temptations put before them.