This afternoon the Supreme Court heard the last of four oral arguments dealing with Obamacare…the states’ argument that Obamacare’s new mandates concerning Medicaid are an unconstitutional intrusion into states’ rights. You can listen to the argument here, and read the transcript of the argument here.
The states can opt out of this expansion if they want to, but, they argue, if they do so, the law gives the Secretary of Health and Human Services the right to cut off all federal Medicaid funding, and, thus they are being coerced into going along. As a matter of law, if the Court finds that the Medicaid expansion is coercive, then the law is unconstitutional.
All seemed to be going well for the government when it was brought out that the Secretary had never cut off funding for a state’s refusal to go along with a new federally mandated program until we learned from the attorney representing the states that the Secretary had, in the past, threatened to cut off all Medicaid funding for the State of Arizona if they refused to implement a new program.
But it’s a letter in the record in this litigation, and it’s a letter from the secretary to Arizona, when Arizona floated the idea that it would like to withdraw from the CHIP program, which is a relatively small part of the whole program.
And what Arizona was told by the secretary is that if you withdraw from the CHIP program, you risk losing $7.8 billion, the entirety of your Medicaid participation. So this is not something that we’ve conjured up — [See page 16 of transcript]
That is the fear that the states have. Although we can “opt out” of the new mandates, if we do so, we could lose all Medicaid funding.
Although the Solicitor General argued that the Secretary would not be able to cut off all funding unless it was “reasonable”, at least two members were unpersuaded. All they wanted from the Solicitor General was some assurance that the Secretary would not do so. The Solicitor General refused to provide that assurance.
CHIEF JUSTICE ROBERTS: Could you give me some assurance? We heard the question about whether or not the Secretary would use this authority to the extent available. Is there circumstances where you are willing to say that that would not be permissible? I’m thinking of the Arizona letter, for example. I mean, if I had the authority and I was in that position, I would use it all the time. You might — you want some little change made? Well, guess what; I can take away all your money if you don’t make it. I win. Every time. It seems that that would be the case.
So why shouldn’t we be concerned about the extent of authority that the government is exercising, simply because they could do something less? We have to analyze the case on the assumption that that power will be exercised, don’t we?
GENERAL VERRILLI: Well, Mr. Chief Justice, it would not be responsible of me to stand here in advance of any particular situation becoming — coming before the Secretary of Health and Human Services and commit to how that would be resolved one way or another… [See pages 47-48]
And then, there was this,
JUSTICE KENNEDY: There’s no real — there’s no realistic choice. There’s no real choice. And Congress does not in effect allow for an out — opt out. We just know that.
And it’s –
GENERAL VERRILLI: No, I guess I –
JUSTICE KENNEDY: — it’s substantial. [See page 70]
Just from the questioning, I would say that the “conservative” members of the Court have problems with the reality that no state can opt our of this expansion.
The ironic part is that if the Solicitor General had just assured the Court that states would not be punished for failure to follow the new mandates, this issue would have gone away.
If you are interested in reading all of the briefs filed in the Supreme Court on this issue, you can find the links for that here.