Tuesday, June 7, 2011

The Medicaid question

Thus far in the courts of appeals, the focus has been on the ACA's minimum coverage requirement (and whether the litigants have standing to challenge its constitutionality). Tomorrow, the arguments at the Eleventh Circuit will include the other significant constitutional issue raised to date: whether the ACA's amendments to Medicaid amount to a coercion of the states, and thus an unconstitutional "commandeering."

As discussed a few weeks ago, the states' position has shifted subtly on this issue. In the district court, the states emphasized not just the amount of federal dollars at stake, but also their reliance on Medicaid's continuing to exist in a particular form. The notion was that the states had agreed to participate in Medicaid with a certain understanding of the program, and the ACA had fundamentally changed those terms, leaving the states effectively caught over a barrel.

In their briefing at the Eleventh Circuit, though, the states now emphasize three factors that, at least in combination, render the ACA's expansion of Medicaid coercive: (1) the amount of federal funds at stake; (2) the disproportionality between the condition (the expansion of Medicaid according to the ACA's terms) and the sanction (the potential loss of all Medicaid dollars); and (3) the fact that the condition jeopardizes pre-existing federal funding--that is, the Mediciad funding the states were receiving before the enactment of the ACA, and not just the incremental dollars provided by the ACA itself.

As we have discussed at length on prior occasions, the states' position has a great deal of intuitive appeal. Most fundamentally, the states really do not have any practical choice but to accept the conditions that Congress imposes on Medicaid dollars. Particularly in the midst of the current economic downturn, it would be next to impossible for a state to forego the federal largesse. So in a very practical sense, the states do not have a choice--they are being compelled.

But the problem, from the beginning, has been translating that basic idea into a judicially administrable doctrine of constitutional law. And I do not think the states' reformulated argument ultimately does any better on that score. Consider, first, the objection that the ACA's condition jeopardizes pre-existing Medicaid dollars. Does this argument imply that Congress is forbidden from adding (or significantly altering) the conditions on an existing federal spending program without also providing additional funding? If so, how much additional funding? And does it mean that, when doing so, Congress can only condition the new funds on the new conditions? Any of these ideas would be radically new, not to mention rather odd constraints to place on the spending power. Or suppose Congress just repealed, and then re-enacted, the entire program. Under those circumstances, are there any pre-existing funds to which the "new" conditions cannot attach?

Or consider the idea of proportionality. Does this imply that whenever Congress creates a conditional spending program, it must provide a series of graduated financial penalties for every category of possible violation of the conditions by the states? If so, that certainly would be an idea never before expressed in a Supreme Court opinion. Would it mean that federal courts are to superimpose a sort of Eighth Amendment proportionality analysis on all threats to the withdrawal or suspension of federal funds? (To the extent the Supreme Court's Eighth Amendment jurisprudence is actually a rough analogue to the sort of analysis the states are suggesting, that review would be extraordinarily deferential. See Ewing v. California. Indeed, it should be more deferential for the withdrawal of funds than for the loss of liberty for life.)

As to the amount at stake, that ground has been well covered. Is it in proportion to the state's budget? Its taxing power? And where does this figure come from, exactly? How is a court to devise a manageable standard? Does this imply that the more money Congress provides the states, the less control it can exert over how those dollars are spent?

Perhaps, as the states' brief seems to suggest, it is not any one of these factors in isolation, but the three in combination, in the context of a singularly enormous federal spending program, which renders the ACA's Medicaid expansion unconstitutional. This is not implausible. But it is also hard to figure out how the Court could ever articulate a rule or principle of constitutional law that actually operationalizes the idea. Even if one could articulate it, the implications could be extremely destabilizing for constitutional law, and in an area that really matters (and matters on a regular, ongoing basis).

In short, in terms of the true values of federalism, the constitutional claim against the ACA's Medicaid amendments are not just viable, but they may actually be much stronger than the objections to the minimum coverage requirement. But I remain quite skeptical that this court (or the Supreme Court) will actually so hold. The judicial difficulties in implementing such a principle just seem too much to overcome.