States Open Briefing on Medicaid Expansion In Case Testing Bounds of Health Reform Law

BNA’s Health Care Daily Report™ sets the standard for reliable, high-intensity coverage of breaking health care news, covering all major legal, policy, industry, and consumer developments in a...

By Mary Anne Pazanowski  

Florida and 25 other states Jan. 10 urged the U.S. Supreme Court to invalidate a health reform law provision that, they say, “threatens States with the loss of every single penny of federal funding” under Medicaid (Florida v. HHS, U.S., No. 11-400, brief filed 1/10/12).

The states' brief—the latest to be filed in the landmark case challenging Congress's authority to enact the Patient Protection and Affordable Care Act (PPACA)—focused on an issue many experts were surprised the court agreed to review: whether Congress in enacting the Medicaid expansion provision exceeded its authority under the spending clause of the U.S. Constitution.

The provision at issue requires states to cover all individuals younger than 65 with income of up to 133 percent of the poverty level or lose their federal Medicaid funding. The health reform law threatens funding for “the single largest grant-in-aid program in existence—literally billions of dollars each year—if [states] do not capitulate to Congress' steep new demands,” the states' brief said.

In conjunction with the individual mandate or minimum care provision also under review by the Supreme Court, the expansion provision will add about 16 million individuals to Medicaid rolls by the end of the decade, the Congressional Budget Office predicted.

The states lost this issue in the U.S. Court of Appeals for the Eleventh Circuit (157 HCDR, 8/15/11). That court held that the provision was not unduly coercive. Although harsh, the provision left states with a choice—they could decline to comply, the court said.

Not a True Choice

The states' brief asked the court to apply the coercion doctrine to invalidate the Medicaid provision. This principle holds that Congress may not use its spending power to coerce states into enforcing the federal government's dictates.

The court should adopt an outer limit on Congress's power to use federal money to force states to take certain actions, the brief argued, saying it is “not just consistent with the Court's precedent; it is a constitutional necessity.”

If PPACA‘s “expansion of Medicaid does not surpass that limit, then no Act of Congress ever will,” the states added.

Contrary to the Eleventh Circuit's opinion, states' participation in Medicaid is not truly voluntary, the states argued. Opting out of Medicaid by refusing to implement the expansion provision is not “a real option,” they said.

“There is no plausible argument that a State could afford to turn down” Medicaid funds, especially if doing so would mean that the state would bear the sole burden of covering medical costs for its neediest residents, the states wrote.

The states called the Medicaid expansion provision, “an extreme and unprecedented abuse of Congress's spending power” that must be declared unconstitutional.

Taxpayers Threatened

In a press release announcing the filing, Florida Attorney General Pamela J. Bondi (R) said, “Forcing states to vastly expand their Medicaid programs or risk losing all funding is an abuse of federal authority.” She called the provision an “overreach of government power [that] threatens the taxpayers of every state in the nation.”

The brief was filed by Paul D. Clement and Erin E. Murphy, of Bancroft PLLC, Washington.

The government's response to the brief is due Feb. 10. Oral argument on the issue is scheduled for March 28, as part of a three-day argument over health reform (244 HCDR, 12/20/11).

For More Information

Full text of the states' brief is at http://op.bna.com/hl.nsf/r?Open=mapi-8qduwt.