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.’ ”
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.