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Obamacare at the Supreme Court, Day 3 (Part 2): Medicaid Expansion

“With all due respect, Mr. Chief Justice, I don’t think we can say that, you know, the States have gotten pretty dependent, so let’s call this whole federalism thing off.”

-Paul Clement

This afternoon, the final round of oral arguments in Florida v. Health and Human Services focused on Obamacare’s expansion of Medicaid.  The audio and transcript are now available. The 26 states involved in the lawsuit (including Wyoming), represented by Paul Clement, claim that Medicaid has become so large and is allotting so much money that even though states technically have the choice of participating in the program or not, in reality there is no choice since so much money is on the line.

It’s not just that states must take Medicaid money and thereby lose their own authority due to the size of the program; they must follow the specific conditions that the federal government places on accepting the money.  Furthermore, Obamacare’s expansion adds new provisions with new strings to an old program: the states are addicted to Medicaid funds, and now have to jump through new hoops not just for the additions, but just to keep the old funding coming.  Finally, the states also tie this Medicaid expansion to the individual mandate, which forces every citizen to participate in the insurance market.

The question of the afternoon was where do we draw the line? Where, exactly, does federal funding become coercive?

This was the one argument in the case where Clement was able to articulate a principle, but not a bright line:

I do think that our principle is not that when you get past a certain level, it automatically becomes coercive per se. But I do think when you get a program and you’re basically telling States that look, we’re going to take away $3.3 trillion over the next 10 years, that at that point, it’s okay to insist that Congress be a little more careful that it not be so aggressively coercive as it was in this statute.

Unlike the argument over the individual mandate—where the attorneys did a brilliant job of distinguishing between commerce and non-commerce, or government regulation of commerce and government creation of commerce—this part of the case really just boils down to “there is a line, and Congress crossed it.”  They’ve left the Court to flesh out the details.

I’m hesitant to even guess where the Justices stand.  Chief Justice Roberts commented: “[The 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.”  Yet he also, along with Justices Scalia and Alito, did not seem satisfied at the Solicitor General Verrilli’s answer to where, exactly, coercion would begin if not here. Justice Kennedy also had some pointed concerns near the close of Verrilli’s arguments.  Absent any detailed theory as to how the Court will use the Constitution to reign in coercive use of Congress’s spending power, I’m unsure how to even guess where the Justices stand.

Nevertheless, the facts of this case are very strong. This is federal coercion, and if upheld it’s a big step toward the death of federalism.

Given the optimism from yesterday’s arguments, it’s quite possible the Supreme Court will not even reach the Medicaid question.  If the individual mandate is unconstitutional and ruled to be not severable from the rest of Obamacare, then the entire law collapses and takes Medicaid expansion with it.  Like everything else in this case, we must wait and see.

Perhaps serendipitously, oral arguments from both Clement and S.G. Verrilli ended with time for conclusions (questioning from the Justices often goes to the very end of the time allotted), and these illustrate the fundamental difference between traditional liberty and “progressive” liberty. These concepts could not be more different.  S.G. Verrilli:

There is an important connection, a profound connection between that problem and liberty. And I do think it’s important that we not lose sight of that. That in this population of Medicaid eligible people who will receive health care that they cannot now afford under this Medicaid expansion, there will be millions of people with chronic conditions like diabetes and heart disease, and as a result of the health care that they will get, they will be unshackled from the disabilities that those diseases put on them and have the opportunity to enjoy the blessings of liberty.

Clement’s response:

Let me just finish by saying I certainly appreciate what the Solicitor General says, that when you support a policy, you think that the policy spreads the blessings of liberty. But I would respectfully suggest that it’s a very funny conception of liberty that forces somebody to purchase an insurance policy whether they want it or not. And it’s a very strange conception of federalism that says that we can simply give the States an offer that they can’t refuse, and through the spending power which is premised on the notion that Congress can do more because it’s voluntary, we can force the States to do whatever we tell them to. That is a direct threat to our federalism.

Amen.

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Friday, 20 October 2017
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