Thursday, June 28, 2012

Did the Supreme Court Make it Unconstitutional to Repeal Medicaid?

In what appears to be an unprecedented interpretation of the Spending Clause, Justice Roberts held that if the federal government makes a significant change in who is eligible to participate in a program, the states receiving funding for the original program cannot constitutionally be required to either accept the changes or end their participation - they must also be able to maintain the status quo.

Roberts introduced an analysis that derives from contract law: Medicaid is a contract between the federal government and the states and, while the federal government reserves the right to modify that contract, it is possible for a modification to be so dramatic that it transforms the program into something other than what was accepted by the states. As in Roberts' view the changes implemented by the ACA reach that point, Congress must allow states to continue the present contract, rather than forcing them to choose either to accept the expanded program or to opt out entirely.

To look at it another way, Roberts appears to be declaring that you cannot take the existing Medicaid program, dramatically change the way it works, and say it's the same program merely because you use the same name. He has a point: that would be almost as ridiculous as turning Medicare into a voucher program and pretending that you're not ending Medicare as we know it. (Cough.)

If the change to Medicaid is as drastic as Roberts suggests, you could take the position that it's not an amendment of the existing program. You could regard it as the repeal of the existing program and its replacement with a new program that simply uses the same name. Would Roberts argue that an explicit termination of Medicaid, and its explicit replacement with "Medicaid II" would be unconstitutional? If not, and Congress has the right to terminate the Medicaid program, how can the "threatened loss of over 10 percent of a State's overall budget" - the exact same loss that would result from the program's perfectly lawful repeal - prevent the federal government from asking states to accept or reject the amended program?

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