Late last week, the 21 right-wing state officials challenging the Affordable Care Act in a federal court in Florida filed a brief defending their right to be in court. Although much of their brief simply rehashes Virginia Attorney General Ken Cuccinelli’s tired attacks on the provision requiring nearly all Americans to carry insurance, the Florida lawsuit also includes a truly unique attack on the health care safety net. According to these 21 state governors and attorneys general, the post-ACA version of Medicaid is unconstitutional because it is too generous to the states:
“Medicaid is the single largest Federal grant-in-aid program to the States, accounting for over 40 percent of all Federal grants to States.” Taking Florida as an example, 26 percent of its budget presently is devoted to Medicaid outlays. In recent years, Florida on average has paid 44.55 percent of total Medicaid spending under its program, with the federal government contributing 55.45 percent. For Florida to establish its own Medicaid program offering the same level of benefits that 2.7 million participants now receive, Florida’s outlays would have to be more than doubled, to the point of consuming more than 58 percent of its budget.
The Hobson’s Choice “offered” by Congress inflicts a “strain” on Plaintiff States sovereignty and fiscs that is “equivalent to undue influence.” The Act’s coercion and impact on State sovereignty violate Article I and the Ninth and Tenth Amendments, as alleged in Count Four.
To make sense of this gobbledygook, one must first understand how the Constitution allocates power between the federal government and the states. On the one hand, Congress is forbidden from simply ordering a state to behave in a certain way — an principle that constitutional lawyers refer to as the “anti-commandeering” doctrine. On the other hand, Congress has broad authority to entice states into action by offering them a federal grant which provides the state with money, but only if the state agrees to comply with certain conditions. The state is always free to turn down this grant, but if it takes the money, it has to comply with its agreement to also obey the conditions.
Medicaid is the largest existing conditional grant program, and these right-wing officials essentially argue that, even though they have decided to take the money that Medicaid offers, they can refuse to comply with the conditions on that money because Medicaid is such a good deal than they couldn’t possibly refuse it.
This novel claim is based in a statement in the Supreme Court’s decision in South Dakota v. Dole that “in some circumstances the financial inducement offered by Congress might be so coercive as to pass the point at which ‘pressure turns into compulsion.’” The justices, however, have literally never held that a conditional grant is “so coercive” as to be unconstitutional, and the lower courts universally reject the claim that Medicaid is unconstitutional just because it is a good deal for the states:
[I]n California v. United States, the Ninth Circuit sustained a Medicaid requirement that States provide emergency medical services to illegal aliens, even though the state contended that it had “no choice but to remain in the [Medicaid] program in order to prevent a collpse of its medical system.” In Padavan v. United States, the Second Circuit rejected the argument that the same Medicaid requirement amounted to “commandeering” for the obvious reason . . . that state participating in Medicaid is voluntary. Similarly, in Kansas v. United States, the Tenth Circuit sustained conditions on federal block grants, stating that “the coercion theory is unclear, suspect, and has little precedent to support its application.”
Setting aside the wealth of constitutional law rejecting the governors and attorneys general’s position, it’s also somewhat baffling why they would want to make this argument in the first place. Taken to its logical end, the state officials’ argument would render generous grants from the federal government to the states unconstitutional. One marvels at how state leaders can believe that they are serving their constituents by trying to drain money out of their own budgets.
Moreover, these officials grossly exaggerate the ACA’s impact on their states’ budgets. Although the ACA increases the number of people eligible for Medicaid benefits, the federal government will reimburse the states for 100 percent of the costs of these new beneficiaries for the first two years that the law is in effect, and will continue to pay at least 90 percent of these costs in the future. This is one reason that many states can actually expect to save money because of the ACA.
According to Whelan’s analysis, “the nearly $2 billion investment from the stimulus act, for example, generated $3.2 billion of economic activity in 2009, with health centers generating approximately $20 billion in economic activity for the communities where they are located.” By extension, the new funding for CHCs that’s part of health care reform ( $11 billion over 5 years) “will generate $54 billion in economic activity in 2015, with $33 billion of this a direct result of the additional investment in the new law” — that’s 457,300 jobs by 2015. 
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