Does the ACA Coerce States to Expand Medicaid?

 

March 29, 2012, by Robert Lowes  —  At the very end of the last Supreme Court hearing on the Affordable Care Act (ACA), the attorneys for both sides in the case departed from the assigned topic of whether Medicaid expansion tramples states’ rights and focused on a more basic Constitutional issue — liberty.

US Solicitor General Donald Verrilli Jr, representing the Obama administration, said today that expanding Medicaid eligibility will extend health coverage to millions of individuals who have diabetes, heart disease, and other chronic conditions with profound results.

 

 

“As a result of the healthcare that they will get,” said Verrilli, “they will be unshackled from the disabilities that those diseases put on them and have the opportunity to enjoy the blessings of liberty.”

He credited the individual mandate with having the same liberating power.

Paul Clement, the attorney for the 26 state officials who have challenged the ACA, replied that policies spreading the blessings of liberty sound good in theory.

“But I would respectfully suggest that it’s a very funny conception of liberty that forces somebody to purchase an insurance policy,” said Clement.

“Direct Threat to Our Federalism”

The official question before the court today was whether the ACA forces states to do something — in particular, to enroll an additional 16 million people in their Medicaid programs through 2019. As with most public-policy disputes these days, the controversy involves money.

Although administered by the states, Medicaid is funded with both state and federal dollars, with Uncle Sam kicking in about two thirds of the total. Clement said today that the federal government is using the states’ dependence on those federal dollars to coerce them into Medicaid expansion, which the states will find burdensome.

The dollar figures at issue are enormous. Through 2016, the federal government will underwrite 100% of caring for Medicaid recipients who enter the program through the new eligibility requirements. The federal contribution will gradually decrease until it reaches 90% in 2020. In all, the states will receive an additional $434 billion in federal Medicaid dollars during that time.

The state officials complain that Medicaid expansion will nevertheless require them to spend at least an additional $20 billion of their own money on Medicaid, which is already a budget buster for them. Plus, they will have less control over what benefits they offer.

 

 

Clement told the justices that the states find themselves unable to opt out of Medicaid expansion because the federal government could withdraw every last dollar of its Medicaid funding, leaving the states entirely on the hook to provide healthcare to the poor. That is a form of coercion, he said, that violates the 10th Amendment of the Constitution, which balances state powers against federal powers in a federalist form of government.

“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 [of Congress]…force the states to do whatever we tell them to,” said Clement. “That is a direct threat to our federalism.”

Other States Welcome Medicaid Expansion, Notes Ginsburg

 

 

Justice Stephen Breyer challenged Clement on the threat of states losing all of their federal Medicaid funding if they refuse to accept a change in the program. Breyer quoted regulations stating that the secretary of Health and Human Services (HHS) “at his discretion” can withhold whatever amount he or she deems appropriate. In other words, said Breyer, an HHS secretary may decline to cut off all Medicaid funding for an uncooperative state. And, unreasonable defunding is always open to challenge.

Clement replied that the mere possibility of a state losing all of its federal Medicaid dollars is coercive enough.

Donald Verrilli, the attorney for the Obama administration, said that Medicaid always has expanded through the decades under the same terms — state participation in the program is voluntary, but if states accept federal dollars, they must follow federal rules on how it is spent. He denied that coercion enters the relationship.

Justice Ruth Bader Ginsburg noted that while officials from 26 states object to Medicaid expansion, officials from other states welcome it.

 

 

“You are saying that because you represent a sizeable number of states, you can destroy this whole program, even though there may be as many states that want it, that don’t feel coerced,” Ginsburg told Clement.

Verrilli said Medicaid’s expansion is a testimony to a successful federal-state collaboration. Sixty percent of Medicaid spending “is based on voluntary decisions by the states to expand beyond what federal law requires, because this is a good program and it works,” said Verrilli. “And the states generally like what it accomplishes.”

Three days of hearings on the constitutionality of the ACA this week have given the high-court justices more fodder for their deliberations. Their ruling in the case is expected by July, just in time to heat up the coming presidential election.

 

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Supreme Court: Severability of Mandate Tricky

 

 

By Emily P. Walker, Washington Correspondent, MedPage Today, March 29, 2012  WASHINGTON — The Supreme Court justices seemed to be at odds over whether the entire Affordable Care Act (ACA) would have to be scrapped if the court rules that the law’s individual mandate provision is unconstitutional.

Wednesday’s oral arguments on the healthcare reform law centered on what should happen if the law’s provision that requires everyone to have health insurance starting in 2014 is found to violate the Constitution — a question often referred to as the “severability” of the mandate.

The Obama administration argues that if the mandate were struck down, the bulk of the law should be allowed to stand.

“Isn’t a half of loaf [of bread] better than no loaf?” asked Justice Elena Kagan, questioning whether it would be wise to ditch the sweeping healthcare reform law wholesale — including the law’s noncontroversial provisions — just because one piece may have to be removed.

No, said Paul Clement, the lawyer for the 26 states that are suing the federal government over the law. Sometimes no loaf is indeed better than a half of loaf, he said. In the case of the ACA, the mandate is too integral to the overall survival of the whole law.

“If individual mandate is unconstitutional, then the rest of the law cannot stand,” Clement argued to the justices Wednesday morning. “If you don’t have the individual mandate to force people into the market, premiums will skyrocket.”

Clement suggested if the mandate is struck down, the whole law should be overturned and Congress can then work to rebuild the parts it wants, piece by piece. Keeping bits and pieces of the law intact is politically complicated and it takes too much work to try and meld the remaining pieces into a policy that works, he argued.

The line of questions from left-leaning justices seemed to indicate they disagreed that no part of the law could function absent a requirement that everyone is insured.

“It’s a choice between a wrecking operation and a salvage job,” said Justice Ruth Bader Ginsburg. “Wouldn’t a salvage job be better?”

Justice Stephen Breyer agreed and said his “totally off-the-cuff impression” was that it didn’t seem necessary to scrap provisions in the ACA that related to disease prevention, biosimilars, or giving doctors incentives to practice in underserved areas, for instance.

Deputy Solicitor General Edwin Kneedler, arguing on behalf of the Obama administration, argued that two key provisions of the law – requiring insurance companies to cover all patients, including those with preexisting medical conditions and not charging higher premiums based on a person’s medical history – could not work without the mandate, but that the rest of the law should stand.

Kneedler argued that if the mandate is found to be unconstitutional, the law should remain largely intact, and Congress could decide how it wanted to change the existing law.

Justice Anthony Kennedy said it would be “an extreme exercise of judicial power” if “one provision was stricken and the others remained to impose a risk on insurance companies that Congress had never intended.” He suggested it would be less extreme to strike the whole law.

Justice Antonin Scalia pointed out the political ramifications of sending a law with its “guts” cut out back to Congress. Many provisions in the law were added by congressional leadership in order to gain votes of individual members of Congress. Without the main part of the law — the individual mandate — “who knows which of them were really desired by Congress … and which ones weren’t,” he said.

Because no side took the position that just the mandate should be severed, the Supreme Court appointed an outside lawyer — H. Bartow Farr — to argue that position. Farr said there are enough other incentives in the ACA to get insurance that every other provision in the law could stand if the mandate is struck down.

The court is expected to rule on the case in June.

The court closed out its 3 days’ oral arguments on the healthcare reform law on Wednesday afternoon, when it heard arguments on the ACA’s expansion of Medicaid.

Wednesday’s arguments were notably less feisty than Tuesday’s arguments, which centered on the most contentious issue of the case: the individual mandate. On Monday the court heard arguments on whether a tax law called the Anti-Injunction Act should prevent the Supreme Court from issuing a decision on the case this year.

 

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What Does Broccoli Have to do With Health Reform?

 

 

by Tianzan Zhou, MedPageToday.com, March 29, 2012  –  Up until now, I hadn’t considered to write an article on healthcare reform simply because of the divisiveness and the complexity of the issue. But after listening to the Supreme Court session and the arguments made on both sides, I can’t help but comment on one popular argument that continuously resurfaces. Yes, it’s the infamous “broccoli argument.”

 

In short, the argument states that if government were given the power to force individuals to purchase health insurance, a precedent will be created that allows for the government to force individuals to purchase other material goods such as broccoli. This is a slippery slope and, as Justice Anthony Kennedy proclaimed during the hearing, “Here the government is saying that the federal government has a duty to tell the individual citizen that it must act, and that is different from what we have in previous cases, and that changes the relationship of the federal government to the individual in a very fundamental way.”

But does it really change the relationship between the government and the individual? It is already mandatory in many states to vaccinate one’s child. If the individual does not act, the child will not be allowed to attend public school. During certain periods in American history, it has also been mandatory for an individual to enroll in the military or face prison time.

And will the mandate lead to a slippery slope in which we all will be forced to buy broccoli? No, thanks to another precedent set by McCulloch v. Maryland that cites the Necessary and Proper Clause of the constitution. In short, Congress has the power to make laws that are not expressly provided by the constitution as long these laws are a necessary and proper means of achieving a major, legitimate public end. The major, legitimate public end in this case is universal healthcare and the mandate is a necessary and proper solution to guaranteeing and subsidizing the healthcare coverage of the sick while allowing for private insurance companies to still be profitable. Otherwise, universal healthcare is only viable through a vast expansion of Medicaid and Medicare. This “government takeover of healthcare” is the reason why the mandate, as ironic as it may seem now, actually originated as a conservative idea.

On the other hand, it is difficult to think of any public end that would deem mandatory broccoli purchases as necessary and proper. Simply purchasing broccoli is, for example, neither a necessary nor proper way of guaranteeing a healthy lifestyle or preventing illnesses. This slippery slope is not as slippery as some make it seem.

What is really disturbing about the broccoli argument is the fact that it shows how out of touch some are with the current state of healthcare. One cannot treat health insurance as a routine material good because there are very few things in life that are as crucial, expensive, and unpredictable as one’s need for healthcare. At any time, not being insured has the potential of carrying with it a life-altering consequence. The broccoli argument dangerously simplifies the complexities of healthcare and masks the very real need for reform.

We should stop focusing on political issues such as the constitutionality of the mandate and start focusing on improving the real weaknesses of the bill such as its lack of malpractice reform and the absence of an effective solution to the primary care crisis. That would be the necessary and proper way to go about improving healthcare.

Tianzan Zhou will be an incoming medical student. He blogs at Taz-Mania.