The Court, Spending, Federalism, Medicaid, and Other Minor Stuff

My thanks to Angel, Dan, and the rest of the regulars at CoOp for the invitation and the introduction.  I am delighted to be guest blogging, especially at a time when my fields of interest are overflowing with developments.  Everyone has been talking about the Commerce Clause questions raised by the minimum coverage provision of the Patient Protection and Affordable Care Act (“PPACA”).  I too have been avidly following this litigation, but because I study (among other things) Medicaid as a vehicle for constitutional change — and that phenomenon is happening right now.  The Court will decide two high-profile Medicaid cases this term, each of which has the potential to facilitate major movement in structural constitutional law.  Oral arguments were heard in the first case, Douglas v. Independent Living Center of Southern California, on October 3d.  The second case, Florida v. HHS, will be heard in the spring. 

I try not to assume that folks know a lot about federal healthcare programs with their layer cakes of complexity; to wit, a justice said during oral argument, “Suppose there were a provision in the Medicaid or Medicare Act… I get the two of them confused.”  (Ahem.)  So, I will begin with a bit of background that I hope will help to illuminate the two cases before the Court.  Later posts will explore Douglas and Florida v. HHS and their implications for conditional spending jurisprudence, federalism, and Medicaid itself more directly. 

Medicaid is a forty-six year old spending program that provides federal money to the states in exchange for states agreeing to provide particular medical services to the “deserving poor.”  Medicaid has been described as a classic example of cooperative federalism, but the program is structured this way for historic rather than philosophical reasons (which I detail in Federalizing Medicaid).  States were responsible for welfare programs since our founding, and when they could no longer afford to provide welfare medicine, they asked the federal government for money to help care for the deserving poor.  The federal government responded with almost conditionless grants to the states through the Social Security Act of 1935.  Over time, the states asked for more money, and the federal government provided it, but each amendment to the SSA included more and broader rules for the federal funds to ensure they were being used properly.  Fast forward to 1965 and the passage of Medicare, with Medicaid in tow.  While Medicare was grounded philosophically in social insurance (but only for people 65 and older), Medicaid continued the old patterns.  Indeed, the elderly convinced Congress not to allow Medicare to be a joint program between the federal government and the states.  So, Medicaid is a cooperative federalism partnership between the federal government and the states, but not because it was thoughtfully constructed that way.  And, this partnership seems to have fostered more disagreement than cooperation between the federal government and the states.

Why does this matter?  A number of reasons.  PPACA’s expansion of Medicaid is a major philosophical change in the program because it eliminates the idea of the deserving poor for the first time in our history.  But, the tensions between the federal government and the states are very much alive and on display before the Court.  Douglas involves a challenge to California’s Medicaid reimbursement rate reductions under the Supremacy Clause, and it raises questions regarding the nature of spending legislation, access to federal courts, private rights of action against the states, and Medicaid’s very aspirations.  Florida v. HHS challenges the institutional structure of Medicaid (the federal-state partnership) and thus raises major spending questions and federalism questions, including the ever-elusive idea of “coercion.”  The kicker: it has been clear for some time that certain justices were eager to decide these questions. 


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1 Response

  1. Harry says:

    This is very helpful. Thanks for the post!