Chief Justice John Roberts
Part 1 of 2
The opinion of the Supreme Court (PDF) regarding the constitutionality of the Affordable Care Act has mostly drawn attention to the individual mandate. Five justices of the Supreme Court, the four less conservative justices plus the author of the opinion, Chief Justice John Roberts, found that the individual mandate was a valid exercise of Congress' taxing power. I myself have focused much attention on the views expressed by the five conservative justices regarding Congress' power under the Commerce and Necessary and Proper powers and the threat these views may pose to our conception of our modern national government as established by the New Deal and court decisions of the era.
But there is no doubt that the first effects of the Court's decision will come in the area regarding ACA's Medicaid expansion provisions. For the first time ever, the Supreme Court ruled that Congress had exceeded its spending power by placing "coercive" conditions on federal funding to states. A peculiar aspect of this part of the Court's decision is that only three justices joined this part of the opinion; remarkably, Justices Breyer and Kagan joined the chief justice in this part of the opinion while Justices Ginsburg and Sotomayor dissented. Normally, a holding of the Court requires at least five assents to the result. In this case, the four conservative dissenters did not assent to any part of Chief Justice Roberts' opinion, despite the fact they appeared to agree with everything in it except the taxing power holding. Conceivably, lower courts could in fact ignore the Medicaid expansion portion of the chief justice's opinion as dicta, not a holding of the Court, but this would fly in the face of the fact that seven justices actually agreed with the result. This seems an unlikely occurrence.
The apparent temper tantrum of the four conservative justices (they clearly should have at least joined in the results they agreed with in the chief justice's opinion) is not likely to have an actual effect on how lower courts (or the federal government and the states) will interpret the decision.
But this is only the beginning of the chaos the chief justice's opinion creates regarding the Medicaid expansion issue. Most commentary has focused on the pronouncements of many Republican governors (such as Louisiana Governor Bobby Jindal, Texas Governor Rick Perry and Lex Luthor himself, Florida Governor Rick Scott) that their states will not accept Medicaid expansion as provided for by ACA. Nor indeed, they've declared, will they establish the state insurance exchanges which ACA requires.
With regard to the exchanges, ACA provides that the federal government can establish insurance exchanges in those states where the state refuses to do so itself. Much less clear is what the federal government can do with regard to the Medicaid-related provisions of ACA. Unlike the apparent assumption of the chief justice and Justices Breyer and Kagan, ACA makes many changes to the Medicaid structure that are not dependent upon the expansion of Medicaid eligibility to person at 133 percent of the federal poverty level. What of those provisions? Are those "optional" for the states? If so, which ones? And what options does the federal government possess regarding states that reject not only Medicaid expansion but also modifications to the "existing" Medicaid program? In many ways, the opinion of the chief justice raises more questions than it answers.
(Continue reading below the fold)
To better understand these issues, let's start with trying to understand what precisely the chief justice's opinion purports to rule with regard to "Medicaid expansion." Roberts wrote:
Nothing in our opinion precludes Congress from offering funds under the Affordable Care Act to expand the availability of health care, and requiring that States accepting such funds comply with the conditions on their use. What Congress is not free to do is to penalize States that choose not to participate in that new program by taking away their existing Medicaid funding. Section 1396c gives the Secretary of Health and Human Services the authority to do just that. It allows her to withhold all “further [Medicaid] payments . . . to the State” if she determines that the State is out of compliance with any Medicaid requirement, including those contained in the expansion. 42 U. S. C. §1396c. In light of the Court’s holding, the Secretary cannot apply §1396c to withdraw existing Medicaid funds for failure to comply with the requirements set out in the expansion. [Emphasis added.]
That seems clear enough. Unfortunately it begs the question: what part of the Affordable Care Act related to Medicaid
is part of the "requirements set out in the expansion?" This is no mere academic question. In his reasoning in response to Justice Ginsburg's dissent on this issue, the chief justice wrote:
JUSTICE GINSBURG claims that Dole is distinguishable because here “Congress has not threatened to withhold funds earmarked for any other program.” Post, at 47. But that begs the question: The States contend that the expansion is in reality a new program and that Congress is forcing them to accept it by threatening the funds for the existing Medicaid program. We cannot agree that existing Medicaid and the expansion dictated by the Affordable Care Act are all one program simply because “Congress styled” them as such. Post, at 49. If the expansion is not properly viewed as a modification of the existing Medicaid program, Congress’s decision to so title it is irrelevant.13 [Emphasis added.]
Roberts does not explain what part of ACA is part of the "Medicaid expansion" and what part may not be. In footnote 13 of his opinion, the he writes:
Nor, of course, can the number of pages the amendment occupies, or the extent to which the change preserves and works within the existing program, be dispositive. Cf. post, at 49–50 (opinion of GINSBURG, J.). Take, for example, the following hypothetical amendment: “All of a State’s citizens are now eligible for Medicaid.” That change would take up a single line and would not alter any “operational aspect[ ] of the program” beyond the eligibility requirements. Post, at 49. Yet it could hardly be argued that such an amendment was a permissible modification of Medicaid, rather than an attempt to foist an entirely new health care system upon the States.
It may not be dispositive of the issue the chief justice purports to decide, but surely more explication of what parts of ACA are part of the "Medicaid expansion" under discussion was in order (and remains in order.) That discussion will surely now commence. Chaos is likely to ensue.
Let's start with a review of the Affordable Care Act (PDF) and its 974 pages. A quick overview reveals that numerous modifications of the existing Medicaid program that cannot be interpreted to be related to the "Medicaid expansion" are included in the law. For example, a review of the table of contents to Title II of ACA demonstrates that the many modifications to the existing Medicaid programs simply cannot be characterized as part of a "new" program or of the Medicaid "expansion":
TITLE II—ROLE OF PUBLIC PROGRAMS
Subtitle A—Improved Access to Medicaid
Sec. 2001. Medicaid coverage for the lowest income populations ............... 179
Sec. 2002. Income eligibility for nonelderly determined using modified
gross income .................................................................................................. 186
Sec. 2003. Requirement to offer premium assistance for employer-sponsored
insurance ............................................................................................. 190
Sec. 2004. Medicaid coverage for former foster care children ..................... 191
Sec. 2005. Payments to territories ................................................................. 191
Sec. 2006. Special adjustment to FMAP determination for certain States
recovering from a major disaster ................................................................. 192
Sec. 2007. Medicaid Improvement Fund rescission ..................................... 193
Subtitle B—Enhanced Support for the Children’s Health Insurance Program
Sec. 2101. Additional federal financial participation for CHIP .................. 194
Sec. 2102. Technical corrections .................................................................... 197
Subtitle C—Medicaid and CHIP Enrollment Simplification
Sec. 2201. Enrollment Simplification and coordination with State Health
Insurance Exchanges .................................................................................... 198
Sec. 2202. Permitting hospitals to make presumptive eligibility determinations
for all Medicaid eligible populations .......................................... 200
Subtitle D—Improvements to Medicaid Services
Sec. 2301. Coverage for freestanding birth center services ......................... 201
Sec. 2302. Concurrent care for children ........................................................ 202
Sec. 2303. State eligibility option for family planning services .................. 203
Sec. 2304. Clarification of definition of medical assistance ......................... 206
Subtitle E—New Options for States to Provide Long-Term Services and Supports
Sec. 2401. Community First Choice Option .................................................. 206
Sec. 2402. Removal of barriers to providing home and community-based
services ........................................................................................................... 211
Sec. 2403. Money Follows the Person Rebalancing Demonstration ........... 214
Sec. 2404. Protection for recipients of home and community-based services
against spousal impoverishment .......................................................... 215
Sec. 2405. Funding to expand State Aging and Disability Resource Centers
................................................................................................................. 215
Sec. 2406. Sense of the Senate regarding long-term care ........................... 215
Subtitle F—Medicaid Prescription Drug Coverage
Sec. 2501. Prescription drug rebates ............................................................. 216
Sec. 2502. Elimination of exclusion of coverage of certain drugs ............... 219
Sec. 2503. Providing adequate pharmacy reimbursement .......................... 220
Subtitle G—Medicaid Disproportionate Share Hospital (DSH) Payments
Sec. 2551. Disproportionate share hospital payments ................................. 223
Subtitle H—Improved Coordination for Dual Eligible Beneficiaries
Sec. 2601. 5-year period for demonstration projects .................................... 224
Sec. 2602. Providing Federal coverage and payment coordination for dual
eligible beneficiaries ..................................................................................... 225
Subtitle I—Improving the Quality of Medicaid for Patients and Providers
Sec. 2701. Adult health quality measures .................................................... 227
Sec. 2702. Payment Adjustment for Health Care-Acquired Conditions ..... 229
Sec. 2703. State option to provide health homes for enrollees with chronic
conditions ................................................................................................... 229
Sec. 2704. Demonstration project to evaluate integrated care around a
hospitalization ............................................................................................... 233
Sec. 2705. Medicaid Global Payment System Demonstration Project ........ 235
Sec. 2706. Pediatric Accountable Care Organization Demonstration
Project ............................................................................................................ 236
Sec. 2707. Medicaid emergency psychiatric demonstration project ............ 237
Subtitle J—Improvements to the Medicaid and CHIP Payment and Access
Commission (MACPAC)
Sec. 2801. MACPAC assessment of policies affecting all Medicaid beneficiaries
.......................................................................................................... 239
Subtitle K—Protections for American Indians and Alaska Natives
Sec. 2901. Special rules relating to Indians ................................................ 244
Sec. 2902. Elimination of sunset for reimbursement for all medicare part
B services furnished by certain indian hospitals and clinics .................... 244
Subtitle L—Maternal and Child Health Services
Sec. 2951. Maternal, infant, and early childhood home visiting programs 245
Sec. 2952. Support, education, and research for postpartum depression ... 255
Sec. 2953. Personal responsibility education ................................................ 258
Sec. 2954. Restoration of funding for abstinence education ........................ 263
Sec. 2955. Inclusion of information about the importance of having a
health care power of attorney in transition planning for children aging
out of foster care and independent living programs .................................. 264
While many of these provisions are clearly related to Medicaid expansion, almost as many are clearly not related to a "new program" and are merely modifications of the existing program. Or consider these sections of ACA that relate to the existing Medicaid program:
Subtitle D—Patient-Centered Outcomes Research
Sec. 6301. Patient-Centered Outcomes Research ......................................... 664
Sec. 6302. Federal coordinating council for comparative effectiveness research
............................................................................................................. 685
Subtitle E—Medicare, Medicaid, and CHIP Program Integrity Provisions
Sec. 6401. Provider screening and other enrollment requirements under
Medicare, Medicaid, and CHIP .................................................................... 685
Sec. 6402. Enhanced Medicare and Medicaid program integrity provisions
............................................................................................................... 691
These provisions certainly do not relate to Medicaid expansion. The chief justice wrote:
Today’s holding does not affect the continued application of §1396c to the existing Medicaid program. Nor does it affect the Secretary’s ability to withdraw funds provided under the Affordable Care Act if a State that has chosen to participate in the expansion fails to comply with the requirements of that Act.
What parts of ACA are part of "the existing Medicaid program?" The chief justice does not say. Here comes the chaos.
Beyond that, what the federal government can do in the face of a state's rejection of "Medicaid expansion" is also not clear from the opinion of the Court, and the ACA itself is not particularly clear on this point. One of the more interesting issues is whether ACA permits the federal government to "federalize" Medicaid expansion in those states where the program's expansion is rejected. One of the areas where federal action in the face of the intransigence of states is expressly provided for is in the area of the creation of insurance exchanges. Section 1311(b)(1) of ACA reads:
(1) IN GENERAL.—Each State shall, not later than January 1, 2014, establish an American Health Benefit Exchange (referred to in this title as an ‘‘Exchange’’) for the State that— (A) facilitates the purchase of qualified health plans;
(B) provides for the establishment of a Small Business Health Options Program (in this title referred to as a ‘‘SHOP Exchange’’) that is designed to assist qualified employers
in the State who are small employers in facilitating the enrollment of their employees in qualified health plans offered in the small group market in the State; and (C) meets the requirements of subsection (d).
This is the provision wiht which Rick Scott and other Republican governors have vowed not to comply.
What happens if states do not cooperate? Then the federal government can set up insurance exchanges available in that non-cooperating state:
The Secretary of Health and Human Services (HHS) will establish exchanges in states that do not create their own approved exchange.
What does a federal insurance exchange have to look like? What
can it look like? Can it include Medicaid expansion for eligible individuals? Can this "public option" be a part of such federal exchanges? Is this an opportunity to
"federalize" Medicaid, at least in those states resistant to it?
I'll look at these questions in Part 2.