The SCOTUS Medicaid Ruling: Part I

Also known as, "was Chief Justice Robert's opinion consistent with the language and intent of the Social Security Act of 1965, or was he legislating from the bench." Let's start with a basic overview of the Medicaid program, the Affordable Care Act Medicaid expansion, and then follow-up a bit with the courts ruling on the issue.

At this time, the Medicaid program, as created by the SSA of 1965, is intended to cover individuals and families meeting certain requirements, among them poverty, disability, age, etc. The program operates as a federal block grant, allowing states to set their own requirements, within certain limits. This, for instance, allows Texas to restrict eligibility for the program for working adults to those making 27% of the poverty level or below, which equates to an income of of less than $3,000 per year. If you make more, you are ineligible. This helps explain why Texas has the highest rate of uninsured persons in the U.S.

Mitt Romney's Massachusetts, on the other hand, has the lowest rate of uninsured. This can be at least partly explained by the fact that their program covers adults that make up to 133% of poverty wages. The way this plays to the advantage of Texas and the disadvantage of Massachusetts in the coming expansion is an interesting topic that will be covered by part two in this series, but for now let's focus on the mechanics of the expansion.

Basically, the ACA, as passed and signed, requires all states wishing to continue to participate in Medicaid (and receive the federal block grants) to expand their eligibility to the same level that Massachusetts already provides, or 133% of poverty. States may refuse, but they will no longer be able to accept federal funds, and will have to deal with the entire cost of insuring the indigent at a state and municipal level. Several states filed suit regarding this provision, claiming that it was unconstitutionally coercive, as they had no choice but to either acquiesce or have to rethink their entire social spending budget.

The response from the solicitor general was that §1304 of the original 1965 act provides for congress the right to "alter, amend, or repeal any provision," of the act, and thus this expansion is merely an amendment, whereby congress is expanding the definition of those to be covered, without expanding it to include all citizens. It seemed like a pretty straight-forward argument, and there weren't a lot of people who thought the court would side with the states. But that's what the court (i.e. Roberts) did. 

The court found that this was a "difference in kind, not degree," and that by turning the Medicaid program from a specialized insurance program intended to cover certain special classes of citizens into a clear component of a universal insurance scheme, they were rewriting the intent of the original act, and thus couldn't tie the preexisting funds to the states' willingness to expand the program per the ACA. The federal government could attach those stipulations to any new funding (which is extremely generous), but not to the old block grants. 

I could see this outcome if Medicaid were expanded to include all citizens. But all Congress did in this scenario was to add (read amend) another special class of citizens: the very poor. The fact that this expanded eligibility appears alongside other provisions in a single bill that seek universal insurance to me doesn't seem relevant. Robert's logic would seem to indicate that if the Medicaid expansion had been accomplished in a separate piece of legislation, and the exchanges and high-risk pools in another, that this format would have been constitutional. And that can't be right. 

My guess is that Roberts wanted to throw out a bone to the conservatives (remember that the four dissenters in this case sought not to overturn just the mandate and the expansion, but the entirety of the ACA) in light of his unfavorable (to them) ruling on the rest of the act. It's the only logic that makes sense to me here, as I really don't see how this limited expansion (less than half as much again as current enrollment) qualifies as an in kind rather than in degree departure, but I guess that's why I'm in a coffee shop in Boulder and not a black robe in D.C.