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White Coat Notes

Medicaid decision in health care ruling may cause conflicts

In the weeks since the Supreme Court issued its decision on the Affordable Care Act, some health law experts have taken a longer look at the implications. And they are concerned about just how far-reaching the decision could be.

The complicated, multipart decision upheld most of the law, including a requirement that most Americans have health insurance or pay a penalty. But it also said the federal government could not require states to expand Medicaid to cover more of the poor, or risk losing all federal funding for the health program.

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The Medicaid decision may have big ramifications, Wendy Parmet, associate dean for academic affairs at Northeastern University School of Law, said in a panel discussion this month.

“It raises enormous questions about the future of state and federal relations,” said Parmet, who filed briefs in support of the law.

Over decades, and especially since the 1930s, the United States has developed a model of “cooperative federalism” in which the federal government pushes states to adopt certain programs and standards by using money — sometimes called grants-in-aid — as leverage.

Justices Antonin Scalia, Anthony Kennedy, Clarence Thomas, and Samuel Alito wanted to throw the entire law out. On Medicaid expansion, they acknowledged in their dissenting opinion that the court has said the federal government can make grants with conditions attached. But, they wrote, if that power were left unchecked it would become a “grave threat” to the structure of government under the Constitution.

Congress created a backup plan in case states refuse to create virtual insurance marketplaces in which individuals and small businesses could buy plans.

But they did not account for states refusing the Medicaid expansion because, the dissenters say, lawmakers knew refusing the deal “was not a practical option” for states. They write:

“Whether federal spending legislation crosses the line from enticement to coercion is often difficult to determine, and courts should not conclude that legislation is unconstitutional on this ground unless the coercive nature of an offer is unmistakably clear. In this case, however, there can be no doubt.

“In structuring the ACA, Congress unambiguously signaled its belief that every State would have no real choice but to go along with the Medicaid Expansion. If the anticoercion rule does not apply in this case, then there is no such rule.”

Chief Justice John Roberts was joined by justices Elena Kagan and Stephen Breyer in writing that the Medicaid expansion was threatening to states. But he “took pains,” Parmet said, to distinguish this expansion from past ones.

On the idea that the government’s requirement that states comply in order to get Medicaid money is overly coercive, former governor and Northeastern professor Michael Dukakis said: “This is truly weird.”

“I don’t know where it’s going,” he said. “Does this mean that every federal new grant-in-aid program — not to mention the existing ones — is going to be subject to constitutional challenge?”

Chelsea Conaboy can be reached at cconaboy@boston.com. Follow her on Twitter @cconaboy.
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