March 27, 2012

ON THE THIRD and last day of oral arguments on President Obama’s landmark health-care law, the Supreme Court will grapple with a couple more issues, including whether the law’s expansion of Medicaid unlawfully coerces states to participate.

Medicaid is a state-federal program that provides health care to the disabled and the poor, including families with dependent children. To encourage participation, the federal government sends money to states that voluntarily set up Medicaid programs that meet federal standards. The president’s health-care initiative expanded Medicaid to include single adults considered indigent under federal poverty standards.

Twenty-six states have challenged the expansion as a coercive use of the federal purse. Although Medicaid remains voluntary, the 26 states argue that they are being forced to acquiesce to the expansion with the threat of losing not only additional federal funds to cover new enrollees but also the billions of Medicaid dollars they already receive. “Congress’ assumption that States would have no choice but to accept its new terms is unconstitutional, but not unrealistic,” the states argue in court documents.

This argument — that the federal government’s generosity in subsidizing Medicaid amounts to coercion — falls flat. States are under no legal obligation to take the money. They might face a political backlash if they refused, but that’s hardly a constitutional problem.

Maryland and a dozen other states that support the change note in a brief that 11.2 million adults would be covered under the expansion. The federal government will pick up almost the whole tab; according to these states, Medicaid enrollment is expected to jump 27 percent by 2019, but average state spending will increase by only 1.4 percent. And states will still have discretion to design programs to meet their needs. The new health-care program, these states conclude, “continues the tradition of State flexibility and experimentation that has been the hallmark of cooperative federalism.”