Contrary to nearly universal expectations, the justices decided to review the constitutionality of the law’s expansion of the federal-state Medicaid program for the poor. That expansion focuses on low-income adults: It requires all states that want federal Medicaid funding to set a floor under program eligibility at 133 percent of the federal poverty level — $14,856 in annual income for an individual, $20,123 for a couple.
Federal support to states for this expansion is very generous. From 2014 to 2016, the federal government will pick up 100 percent of the costs for covering these newly eligible low-income adults; thereafter, states will pick up a small portion of the new costs, and, according to the Congressional Budget Office, this will add less than 1 percent to the Medicaid costs states would have paid in the absence of the new law.
Two recent nonpartisan analyses concluded that the Affordable Care Act overall will reduce the 50 states’ health-related costs by about $100 billion through 2019, including lower expenditures for charity care because of a shrinking number of uninsured people.
The importance of the Medicaid expansion is evident from current program eligibility limitations for low-income adults in Florida and Texas, the lead plaintiffs in the lawsuit. Working parents of dependent children in Florida are ineligible for Medicaid if their incomes exceed 58 percent of the federal poverty level, or $11,072 in annual income for a family of three; in Texas, the cutoff is 26 percent of poverty, or $4,964.
Even worse, in both Florida and Texas — and many other states — individuals and couples with no dependent children are ineligible for Medicaid even if they are literally penniless.
Throughout the 47-year history of the Medicaid program, Congress has expanded eligibility for low-income children, pregnant mothers, seniors and people with disabilities. Significantly, there has never been a successful challenge, at any court level, of these expansions.
With respect to the expansion of coverage for low-income adults, even the two courts whose decisions would invalidate the individual responsibility provision — a federal district court judge in Florida and a divided three-member panel of the U.S. Court of Appeals for the 11th Circuit — held, without dissent, that the new law’s Medicaid expansion is constitutional. Yet the Supreme Court agreed to hear argument about that expansion.
The plaintiff states have challenged the Medicaid expansion based on a novel “coercion” theory that has never been successfully invoked to invalidate a congressional statute: Even though the states have an unambiguous right to drop out of the Medicaid program, they claim that federal funding is so substantial that they feel “coerced” to accept the Medicaid expansion because they don’t want to lose federal Medicaid funding.
In essence, the plaintiff states argue that the federal government’s funding for Medicaid is so great that they cannot afford to decline it by disobeying the new expansion requirement. It is this generosity, they argue, that constitutes the new law’s unconstitutional “coercion.”
If the court accepts this argument, then any significant federal initiative in the future would be in jeopardy if that initiative were tied to the achievement of key objectives — such as protecting the environment, strengthening civil rights, improving educational opportunities or enabling a health program for the poor to actually serve the poor. Such a ruling would handcuff the federal government and undermine accountability of public expenditures.
It would amount to an unprecedented and potentially devastating attack on the government’s ability to act on behalf of the nation’s well-being. In so doing, this judicial activism would abrogate Congress’s constitutional legislative functions and arrogate them to the unelected lifetime members of the court.