What was supposed to be one of the more straightforward aspects of the case against the Affordable Care Act turned out to be the most complicated. While the big story is obviously Obamacare's unexpected victory, the point about expanded Medicare eligibility is worth considering in more detail.
First, a little history/context, which will help the larger story make sense.
The ACA, as part of the effort to expand insurance coverage, changed eligibility standards -- in 2014, everyone earning up to 133% of the federal poverty line will be able to participate in the Medicaid program. That, of course, is expensive, and states have howled that they can't afford this -- since states pay as much as half of Medicaid costs already.
To accommodate, the Obama administration, under the reform law, will cover every penny of the additional costs, paying states for the expansion. This will be phased out slowly -- by 2020, the federal government will pay 90% of the expansion.
To make this work, states weren't given much of a choice under the ACA: they were being told to go along with Medicaid expansion or risk losing their Medicaid funding from Washington altogether. Florida, among other states, said this was coercion -- Medicaid, they argued, was supposed to be an option for states, not a mandate from Congress.
The administration's response had been pretty straightforward: it's still optional; if states didn't like the expansion on Medicaid eligibility, they didn't have to participate in the Medicaid program.
Today, the Supreme Court took issue with some of this. Matt Yglesias had a good item on this.
Chief Justice Roberts joined with the other conservatives on the court to argue that this penalty -- withdrawing of existing federal money unless states kicked in new money of their own -- overstepped the constitutional bounds of the spending power. So now states have the carrot to expand Medicaid but not the stick.
Kevin Russell added:
The Court's decision on the constitutionality of the Medicaid expansion is divided and complicated. The bottom line is that: (1) Congress acted constitutionally in offering states funds to expand coverage to millions of new individuals; (2) So states can agree to expand coverage in exchange for those new funds; (3) If the state accepts the expansion funds, it must obey by the new rules and expand coverage; (4) but a state can refuse to participate in the expansion without losing all of its Medicaid funds; instead the state will have the option of continue the its current, unexpanded plan as is.
If Florida tells Washington it doesn't want to expand Medicaid eligibility at the state level, it won't get the additional money, but it won't lose its current federal Medicaid funding.
I happen to think states would be crazy not to accept the deal, but there are states run by far-right governors who care more about ideology than public policy, so "crazy" isn't terribly unusual.
Right about now, you might be thinking, "But, Steve, if the court majority is limiting Congress' power on holding funding threats over the states, won't this have a sweeping impact going forward?" It's a good question, and I'm afraid the legal consensus on this is still coming together. The ruling is only two hours old; we'll know more soon enough.
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All me and my friends can talk about is the massive jobs boom the healthcare act will create - the biggest job boom since the dotcom era - but no one in he dem party is talking about it! Manufacturing for medical products and equipment, salespeople, inventory stockers, blood draw, truck drivers for transport, x-ray techs, laundry people for sheets and towels, claims processors, nurses, nurses aids, pharmacy techs...the list of jobs this will create, and the money it will generate, is ridiculous! And what programs can we put in place to get the unemployed trained and hooked up with these jobs? I was a medical assistance 20 years ago and I'm ready to dust it off and go to work!
You will also have to have a decent amount of new doctors too. That may be a bottleneck if many more people use healthcare services that did not before. One big part of healthcare that I always spout off about is the high costs associated with unhealthy lifestyles like obesity, smoking, excessive drinking, etc. IF the average person took care of themselves better, there would be a pretty big drop in healthcare costs - far fewer prescriptions for cholestorol, diabetes, and similar preventable "illnesses" - as well a whole lot of less trips to the emercency room and a drop in medical procedures because of unhealthy living. Honestly, I think most folks would rather take a pill (which isn't free) to cut cholesterol rather than just eat more veggies and cut back on fats, for example.
"...if the court majority is limiting Congress' power on holding funding threats over the states, won't this have a sweeping impact going forward?"
The answer is yes.
And yes, we still need new Supreme Court justices.
Give: http://www.barackobama.com/splash/are-you-in-c?
That was supposed to say Medicaid in the first paragraph, not Medicare, right? I don't think Medicare was involved in this ruling, but considering how radical the minority was, I wouldn't be surprised if they tried to go after Medicare as well. Sorry, I don't normally pick on typos, but that one changed the story in a rather confusing way.
So true about far right governors valuing idealogy over what might be good for their constituents. In Florida, Gov. Scott refused federal stimulus money to help fund a high speed rail that would have created thousands of jobs while helping ease traffic, reduce dependence on oil, and reduce carbon emissions. Now, that is progress!!
As a citizen of Louisiana (currently celebrating our bicentennial of statehood -- 200 years of crazy!), I fully expect my nutty governor and legislature to take this route and opt out of expanded Medicaid.
Are you talking about the Koch brother's Louisana Purchase, Bobby Jindal?
I think the problem is in withholding all of the Medicaid funds. If it were a penalty of 5-10% I believe it would have been upheld as it seems to mirror how the federal government "encourages" states to have a minimum drinking age of 21 by withholding 10% of federal highway funds of states that doe not comply.
See http://en.wikipedia.org/wiki/South_Dakota_v._Dole:
The ruling will have an impact on future appropriations for states. What constitutes a new program as opposed to a current program is what the Congress and most likely, the courts, have to sort out. For example, the Federal Transportation Dept. wants to impose rules about state laws on use of cell phones in cars. The federal government cannot impose those rules on current highway fund programs that have plans and funds already appropriated. But if Congress sets up a new program for transportation funds, those rules can be imposed. Realistically, the Congress may end a program and reconstitute it with a new one that has new rules. Ending a program is simple because once the appropriations are spent on the contemplated projects that have been approved under the old plan, Congress is not required to continue funding for new projects under the old plan. Of course, there will be states that argue the new program is essentially the same as the old program. That is when a court will have to step in to decide if Congress can end old programs and replace them with a new program that does the same as the old. I don't see the states winning this argument because the court would be interfering with the appropriations power.
This is interesting:
Was Scalia’s Dissent Originally a Majority Opinion?
http://www.volokh.com/2012/06/28/was-scalias-dissent-originally-a-majority-opinion/
Here's another POV that seems to reinforce the point above (doncha just love close reading?):
http://delong.typepad.com/sdj/2012/06/more-evidence-that-scalias-dissent-was-originally-written-to-be-the-opinion-of-the-court.html
BRAD DELONG: MORE EVIDENCE THAT SCALIA'S DISSENT WAS ORIGINALLY WRITTEN TO BE THE OPINION OF THE COURT...
Why can't the administration do what insurance companies do all the time: enhance the new part of the program in a way that expands benefits to the states and to those now receiving Medicaid, but make those benefit expansions contingent upon accepting ALL of the new part?
I had to stay on my OLD insurance policy, which doesn't provide any of the benefits of the ACA. I still have to pay for 100% of preventive care until my deductible is reached. Even co-pays don't apply. The company can (and, no doubt, would) kick me off if I ever get sick. In fact, they don't even sell "my policy" anymore. I'm grandfathered into it, and if I want to change, I have to re-apply as if I'd never been covered. (I've paid premiums for almost 15 years, but have never filed a claim.)
The alternative was to go to a new policy that DOES include these things, but at a higher price. HHS should figure out a way to do this kind of thing with the "new" part of Medicaid coverage, as an "incentive" to the states.
They already have. The carrot is still there--90-100% federal funding for the expansion. It is only the stick of losing the current Medicaid funding which has been ruled unconstitutional.
Hopefully most states will still take the money. Some may not. And some low-income, childless, ailing adults may decide to leave those states in order to qualify for expanded Medicaid in a more progressive state.
I mean, maybe I'm way wrong here, but how does this decision not infringe on Congress's storied power of the purse? Doesn't Congress have the right to put conditions on its spending?
Yes, it does. But the USSC says it is limited to the new spending, not the old spending.
I read tha part closely, and Roberts' reasoning is very sound. Threatening to take away 10% or more of a state's total existing budget goes beyond "encouragement" and becomes punitive. Remember that we fund Medicaid the way we do, precisely because it is NOT an enumerated federal power.
So basically any state who doesn't take the expanded Medicare, looks very bad next election. Florida, of all states, doesn't want to be that guy next election.
Florida spins facts frequently and have gerrymandered the state to keep the GOP in power at least until the next census. Gov. Scott continues the giveaway to big business then cries poverty when it comes to education and health care. Until the electorate wakes up and votes the bums out, this will continue to be stonewalled and litigated, unless some big healthcare donor makes the GOP an offer they can not refuse.