March 25, 2012
Medicaid could be in Supreme Court's sights

WASHINGTON -- Ever since the Democratic Congress passed President Obama's health care law, critics have focused their ire on the requirement that all Americans have health insurance beginning in 2014.

But some legal experts believe -- and progressives worry -- the Supreme Court's conservatives will instead target another mandate in the new law: the requirement that the states expand the Medicaid rolls and provide subsidized health care for as many as 17 million more low-income people.

On Wednesday, the third day of oral arguments on the law, the 26 Republican-led states will argue that the federal pressure to expand Medicaid to all low-income Americans also violates states' rights.

Medicaid "is the real sleeper issue," said Simon Lazarus, counsel for the National Senior Citizens Law Center. "If the court buys the 'coercion' argument, it will effectively mean that every expansion of Medicaid since 1965 will be vulnerable to challenge." Such a ruling could also undercut an array of federal social programs.

Justice Anthony M. Kennedy, whose stand could be decisive, has repeatedly spoken of the need to protect the "sovereignty" of the states from a too-powerful federal government. Last week, he spoke for a 5-4 majority in voiding part of the federal Family Medical Leave Act. His opinion rejected a lawsuit from a fired state worker on the grounds it would threaten "our constitutional design" that "states, as sovereigns, are immune" from damages claims.

At first, the challenge to the Medicaid provision was treated as far-fetched.

Throughout the 20th century, Congress passed laws that offered states money for certain purposes -- for highways, schools, colleges, hospitals and many others -- in exchange for following federal rules. The Supreme Court has never struck down such a spending law -- including previous Medicaid expansions -- even though the states have often griped about "unfunded mandates" from Washington.

The new Medicaid provisions also look to be quite generous to states. In the past, Congress has paid about half to three-fourths of a state's cost for providing health care for the poor, about half of whom are children. Under the new law, Washington will initially pay 100 percent of the cost for expanding Medicaid. The federal share will drop to 90 percent by 2020.

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