Preliminary thoughts on today’s decision splitting the proverbial baby

Today, Chief Justice Roberts truly wore King Solomon’s crown. He managed to split the issue with regard to both the “individual mandate” requiring all Americans to have health insurance coverage by 2014 as well as the expansion of Medicaid making all Americans up to 133% of the federal poverty level eligible for Medicaid coverage. The Medicaid aspect of the decision is particularly confusing, given that one must count the votes twice to understand what has happened.

First, seven of the justices (Roberts, Breyer, Kagan, with Roberts writing in the majority; Scalia, Kennedy, Thomas and Alito, with Scalia writing for the joint dissent) voted that the Medicaid expansion was unconstitutionally “coercive” under South Dakota v. Dole. So, the first vote as to whether Congress has the power to require states to expand Medicaid was answered with a no; this is impermissibly coercive because the states have too much to lose if all of their Medicaid funds are at stake. This is the first time the Court has ruled that federal spending legislation is impermissibly coercive.

But, the second question is whether that historic vote for impermissible coercion means the Medicaid expansion fails in its entirety. [more after the jump]  Here, five justices voted to uphold the expansion but strike the remedy (removal of all Medicaid funding), rather than strike the expansion from the statute. Justices Roberts, Breyer, Kagan, Ginsburg, and Sotomayor agreed that the proper response was to sever the Medicaid expansion so that if a state does not comply with the expansion of Medicaid eligibility, the state cannot lose all Medicaid funding. Instead, it will only lose the funding attached to the expansion but will continue to receive existing Medicaid funding. Justices Scalia, Kennedy, Thomas, and Alito would have invalidated the entire Medicaid expansion. The ultimate result is that the Medicaid expansion was upheld, but states may opt out of it without jeopardizing all of their Medicaid funding under 42 U.S.C. 1396c.

I was surprised by the number of votes in favor of impermissible coercion, but I also would be surprised if many, if any, states opt out; they will have great pressure from both physicians and hospitals to get their poorest residents into Medicaid. Also, states that opt out of the Medicaid expansion would have to figure out how to fund the cost of the poorest uninsured, who often arrive in emergency departments with late-stage injuries and diseases and thus cost more to treat. Of course, if a number of states opt out, then states that have fully-expanded Medicaid may see greater increases of their enrollment that ultimately could lead to political pressure to modify Medicaid eligibility in a different way (as we have seen at other points in Medicaid’s history).

It is hard to say what the future implications of the reaffirmed coercion doctrine will be. The majority applied the coercion concept primarily through factual application rather than by expanding supporting theory (other than reiterating the “political accountability” notion from New York v. U.S). Undoubtedly more challenges to spending legislation will follow, but this disposition does not tell us much more about coercion than we knew before 10:15 this morning.

More to come when the reporter calls calm down.

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7 Responses

  1. The Court has staedfastly approved arbitration clauses in recent years under the banner of freedom of contract. Does today’s decision sugeest that states are less able to protect themselves than Apple cutomers? If so, why. (See Herbert Wechsler long ago on the abilty of states yto protect themselves from fed oppression.)

  2. Brett Bellmore says:

    Of course, the real coercion in these cases is the fact that the federal government extracts tax revenue from a state, and if thwarted, does not in any way return it to the state economy. Rendering the state incapable of funding it’s own activities without becoming economically disadvantaged relative to states whose federal taxes are in some way returned.

    So, coercion is ok, just not super-duper coercion…

  3. Mike Zimmer says:

    There is a lot of talk about this being a split decision. No Justice joined the opinion of CJ Roberts on the Commerce Clause issue. J Scalia,Kennedy, Thomas & Alito do not join the chief’s opinion at all,at least if you read the posting the result on the official docket of the Supreme Court:

    Adjudged to be AFFIRMED IN PART, REVERSED IN PART. Roberts, C. J., announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I, II, and III-C., in which Ginsburg, Breyer, Sotomayor, and Kagan, JJ., joined; an opinion with respect to Part IV, in which Breyer and Kagan, JJ., joined; and an opinion with respect to Parts III-A, III-B, and III-D. Ginsburg, J., filed an opinion concurring in part, concurring in the judgment in part, and dissenting in part, in which Sotomayor, J., joined, and in which Breyer and Kagan, JJ., joined as to Parts I, II, III, and IV. Scalia, Kennedy, Thomas, and Alito, JJ., filed a dissenting opinion. Thomas, J, filed a dissenting opinion.

  4. Joe says:

    Yes, Congress has the power to tax and do other things that “extracts tax revenue from a state.” They also can “coerce” individuals to do various things like jury duty.

    True enough that only “super duper” coercion is not allowed.

  5. Ken Rhodes says:

    Jury duty????

    Geez, they can coerce a citizen to leave his family and put on ugly clothes and go halfway around the world to shoot at somebody he never met, and maybe get his butt killed in a jungle he can’t pronounce.

    That sounds like “super duper coercion” to me. Did somebody in the real world think the government had no power to coerce?

  6. Nicole Huberfeld says:

    Mike, my point was simply that the CJ split the handful of constitutional issues in such a way as to find majorities in contentious circumstances. But, to be a bit Machiavellian, I think Roberts addressed the CC issue as a way to encourage litigation seeking to limit by virtue of the inactivity/activity (or some other formalistic) distinction.

  7. Vickie Williams says:

    Nicole – Congrats on getting a cite into the Supreme Court decision. I think that this opinion will open up all kinds of questions about the future of Medicaid and cooperative federalism. The reason that Medicaid was written to permit the HHS Secretary to pull all Medicaid funds for failure to include certain mandatory populations is because of the fear that the state would fail to cover, or cover inappropriately, certain disfavored populations (like mentally disabled, for instance), and there would be no real consequence. But if you will lose your funding for favored populations (like children), then you will make sure you are administering the program correctly for all. I think this increases the vulnerability of the most vulnerable people in our society, especially during difficult economic times.