Expanding Health Care Access to the Poor, ‘A Simple Case’? Roberts: Not so much

By: Matt Selig

About thirty employees from three non-profit organizations that advocate for increasing access to health care held their collective breath in an unadorned conference room on the morning of June 28th.  Several typed nervously on their cell phones while others chuckled through anxious small talk and a few seemed to meditate or perhaps pray.  None of them lost sight however of the large projected image on a pull-down screen of scotusblog.com’s innovative live coverage of that day’s United State Supreme Court session where the opinion in the constitutional challenge to the Affordable Care Act (ACA) (National Federal of Independent Business (NFIB) v. Sebelius) would be issued.  This, of course, was the reason they had gathered.

Finally came the blog post that quieted the room: “10:07 Amy Howe: We have health care opinion.”

All eyes in the room were now transfixed on the pull-down screen.

“10:08 Amy Howe: Parsing it asap.”

“10:08 Amy Howe: The individual mandate survives as a tax.”

Thunderous applause echoed off the conference room’s patterned linoleum floor and mini blinds.  The ACA’s requirement on individuals to maintain health insurance, one of the linchpins of the law’s expansion of health insurance coverage to tens of millions of uninsured U.S. residents, had been deemed constitutional by the Court as a valid exercise of Congress’s power to tax.

Moments later, another post, “10:10 Tom: So the mandate is constitutional. Chief Justice Roberts joins the left of the Court.”, drew various exclamations to the effect of “Wow!”, and spontaneous expressions of pure joy.

The assembled advocates had barely enough time to consummate a few hugs and high-fives by scotusblog’s next update: “10:11 Amy Howe: The Medicaid provision is limited but not invalidated.”

Quizzical and concerned looks flashed across the faces of those in the room.  Apparently this was not simply an up or down verdict on the ACA after all.  The lawyers and policy analysts among the advocates would have to do their own parsing of the opinion, asap.

In the weeks since the Court’s decision in the ACA case, many proponents of the law, particularly those concerned with health care access for the poor have simultaneously carried starkly divergent sentiments about the result reached.  A law, literally decades in the making, that was designed to expand health insurance coverage to more than thirty million Americans and greatly improve coverage for those already insured had survived yet another near-death experience that at least matched the drama of its slim passage by Congress in 2010.  But, the Court had substantially curtailed the ACA’s mechanism for providing health insurance coverage to the poorest in our country.

Medicaid, of course, is the public health insurance program established in federal law and carried out jointly by the Federal and State governments, that, even before the ACA, provided coverage for approximately sixty million Americans (according to Faces of Medicaid, a November 2011 publication of the Kaiser Commission on Medicaid and the Uninsured).  The Federal government pays for at least fifty percent of the cost of the Medicaid program in each State and sets a minimum level of benefits and eligibility categories that States may expand upon.

The ACA, as passed by Congress and signed by President Obama, provides that States must expand coverage in their Medicaid programs for the first time to all those under age 65 in households with incomes beneath 133 percent of the federal poverty level (FPL) ($14,856 for a single person) or risk losing their existing  Medicaid funds.  Previously, the Federal government required States to cover only those at very low income levels who also met another eligibility requirement, such as being a child or having a disability.  The ACA provided that if a State did not expand its Medicaid program, the United States Secretary of Health and Human Services (HHS) could withdraw all federal funding for that state’s Medicaid program.

But, this stipulation was hardly a ruthless powerplay by Congress.  It was more in the nature of an extravagant gift to the States because the ACA requires the federal government to pay the States’ entire annual cost of this Medicaid expansion at first and then a slightly decreasing amount until 2020 and thereafter when the federal government must pay 90 percent of the cost incurred by States to expand Medicaid eligibility to all low-income Americans.  All in all, the ACA was expected to provide health insurance to more than 15 million poor U.S. residents through the expansion of Medicaid by States, about half of the more than 30 million slated to gain health insurance because of the ACA.

So, how did the Court limit but not invalidate the Medicaid provision of the ACA as scotusblog.com had reported?  In a blow to poor, uninsured Americans,  Chief Justice John Roberts’ majority opinion in NFIB v. Sebelius struck down the ACA’s provision allowing the Secretary of HHS to withhold all of a State’s Medicaid funds if it chose not to expand Medicaid eligibility to all those below 133 percent of the FPL.  The Chief Justice reasoned, in part, that under the Constitution’s Spending Clause, the Federal government could not try to expand insurance coverage for the poor in this way because States would be unconstitutionally coerced into partnering with the federal government to provide health insurance for the poor as distinguished from being merely encouraged to do so.

Although States still have quite a strong incentive to expand their Medicaid programs to their poorest residents, because the Federal government will pay them so generously to do it, they are less likely to go along because they no longer risk losing their existing federal Medicaid payments.  Recent pronouncements by some State officials around the country who oppose the ACA indicate the Court’s ruling will lead them to refuse to expand their Medicaid programs to more of their poor residents.  Millions in poverty who would have obtained health insurance because of the ACA may remain uninsured as a result of Chief Justice Roberts’ opinion.

Adding to the disappointment in the troubling outcome of the Medicaid issue in the ACA case was the unconventional or, one might say, tortured or unpersuasive reasoning behind the Court’s conclusion.  Justice Roberts explained why he viewed the ACA’s deal for States to expand their Medicaid programs as impermissible under the Spending Clause.  He wrote that States really had no choice but to expand their Medicaid programs because the resulting loss of existing Medicaid funds would be tantamount to “economic dragooning that leaves the States with no real option….”  The Court’s majority also expressed grave concern that Congress, by leaving States with “no choice” but to adopt a funding stream with conditions, would be acting to “achieve its objectives without accountability…,” while state officials would be unfairly held “politically accountable.”  These are factual assertions, as opposed to legal ones, and they appear to not equate with reality.

To be sure, the ACA as signed by the President provides States with a choice to expand their Medicaid programs (mostly at the expense of the federal government) or forfeit their Medicaid funding.  These days, State officials are making extremely difficult budgetary decisions every day and the ACA presented yet another one.  It has also always been the case that States can only receive Medicaid funds if they comply with minimum requirements for the program.

Also, most members of Congress would probably find the notion that they were not politically accountable for the ACA to be amusing.  To say that the ACA has been the subject of public debate would be the understatement of the decade.  From the standpoint of State elected officials, if they decided to cancel their Medicaid program because they would not agree to expand Medicaid pursuant to the ACA they would have every opportunity to explain that the federal law provided them with a tough choice in a press release or in a letter to constituents.  It is not that complicated a proposition for voters to understand.

Yes, State officials would very likely experience a negative public reaction for such a decision in most, if not all States, but not because the public didn’t “get” the options posed to State officials by the Federal government.  There would probably be an enormous backlash because the public does “get” that eliminating Medicaid would be devastating to the health and wellbeing of a State’s population, its health care system, and its economy.

As Justice Ruth Bader Ginsberg pointed out in her opinion that dissented from the Court’s majority position on the Medicaid issue, the NFIB v. Sebelius majority “for the first time ever –finds an exercise of Congress’ spending power unconstitutionally coercive.”  The Court’s ample precedent permitting Congress to attach conditions to the receipt of federal funds by States seemingly should have guided the resolution of this ACA’s Spending Clause issue as it had in every other similar instance.  In Justice Ginsberg’s words, it was “a simple case” to uphold the ACA’s Medicaid expansion provision in its entirety.

The Court majority’s reasoning in reaching its conclusion that States were unconstitutionally coerced into expanding Medicaid by the terms of the ACA also employed another unusual twist of logic.  The Chief Justice conjured a new standard in NFIB v. Sebelius that Congressional action requiring States to abide by the conditions of one federal funding stream if they expect to receive another is strongly suggestive of an unconstitutionally coercive federal policy.  The Court’s majority found that the ACA’s expansion of Medicaid was in fact an entirely new program of federal funding and that under the Chief Justice’s new reasoning Congress could not condition a State’s receipt of its existing Medicaid funds upon its willingness to comply with the conditions of the so-called new Medicaid program created by the ACA.

An analogy of the Court reasoning would go something like this: an addition to an existing home has all the same characteristics as the construction of a new home in a lot next door.  To back up the Court’s assertion that the new second story on the Medicaid house was actually a neighboring Medicaid abode at a separate address, Justice Roberts had an explanation.  He wrote that a State’s expanded Medicaid program, providing eligibility for everyone younger than 65 who are below 133% of the FPL ($14,856 for a single person) was “no longer a program to care for the neediest among us, but rather an element of a comprehensive national plan to provide universal health insurance coverage.”

In essence, the Court was stating that this population of such limited means targeted by the ACA was not destitute enough to be worthy of federal assistance intended to alleviate its distress.  Since a person without a child or a disability living at the poverty line could never be considered among the neediest in our society, Justice Robert surmised, a public health insurance program to help them could only be considered part of a plan to make sure everybody at every income level has health insurance.  That this unprovoked and breathtaking effort to judicially define the relative neediness of poor members of our society played such determinative role in the NFIB v. Sebelius case is difficult to comprehend.

The true impact of the Supreme Court’s decision on the Medicaid expansion issue in NFIB v. Sebelius is clearly yet to be known.  Perhaps public sentiment or a thoughtful analysis of the options provided by the ACA will lead State officials throughout the country to expand their Medicaid programs and the vision of the law for poor Americans will be realized.  This surely is the desire of advocates for health care access for the poor.

A broader question is whether any future expansion of Medicaid eligibility or benefits by the Federal government will prompt legal challenges from States who wish to make their compliance with such Medicaid changes optional.  If the Court did assess such litigation in the same way as it did in NFIB v. Sebelius, it would put a damper on the ability of the Federal government to continue to improve health care access for the poor though the Medicaid program.

Pulling back to perhaps the ultimate question at stake, can the United States Constitution be interpreted as a bar to federal policies that increase health insurance coverage and access to health care for the poor?  No.  The march toward health care justice continues on.

Matt Selig is the Executive Director of Health Law Advocates (HLA), Massachusetts’ only non-profit public interest law firm dedicated exclusively to improving access to health care.  As an attorney at HLA since 2005, Matt has represented low-income consumers needing legal help to access health care.  Matt’s career in health care advocacy dates back to the early 1990’s when he served as a staff assistant for the late Senator Edward M. Kennedy on the United States Senate Committee on Labor and Human Resources (now known as the Committee on Health, Education, Labor and Pensions).  He later worked as a legislative aide for Massachusetts State Representative Kay Khan who is now the Co-Chair of the Massachusetts Legislature’s Joint Committee on Children, Families and Persons with Disabilities.  He received his undergraduate degree from Washington University in St. Louis and graduated magna cum laude from Suffolk University Law School.  

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