The Affordable Care Act didn’t survive entirely as passed—somewhat lost amidst the intense focus on the individual mandate was a ruling that part of the law’s Medicaid expansion was unconstitutional. The Supreme Court’s modification of the law probably won’t have a fundamental, long-term impact, but does make it easier for rogue Republican governors to exempt their states from participating in the expansion—and could cost millions of low-income, uninsured Americans a chance at government health care.
First, a brief refresher on what the ACA did to Medicaid: as you may know, the program is run jointly by the states and the federal government to provide health care to (very) low-income Americans. States set up their Medicaid system according to federal regulations and get most of the money from the feds, while funding some of the program themselves. Healthcare reform aimed to expand coverage, in part, by expanding Medicaid to cover people up to 133 percent above the poverty line (as compared to 63 percent now)—that is, at or below income of $30,700 for a family of four. This expansion would extend coverage to 16 million additional people by 2019.
To facilitate this expansion, the law offered states 90 percent of the cost, coupled with severe penalties if they chose not to participate—states would lose almost all existing federal grants for the program. This made it extremely unlikely that any governor or legislature, no matter how red, would essentially trash Medicaid in their state by opting out of an expansion.
Twenty-six states then challenged that part of the law, arguing that it unconstitutionally coerced them to join a federal program.
What the Court ruled, after much internal maneuvering, was that while the federal government could offer incentives for states to expand Medicaid, the penalties for not doing so were indeed unconstitutionally coercive.
The invaluable SCOTUSblog chronicles the horse-trading that took place. Liberal justices Sotomayor and Ginsburg believed the entire expansion was constitutional and should be upheld in full. On the other hand, Justices Scalia, Alito, Thomas and Kennedy believed the entire expansion should be struck down—this is consistent with their opinion that the law should be invalidated in full. Meanwhile, Chief Justice Roberts, joined by Justices Kagan and Breyer, believed that withholding the money was unconstitutional, but offering the incentives to expand was not.
The logjam was broken when Sotomayor and Ginsburg technically joined the Roberts group—they voted that if indeed withholding federal funds was unconstitutional, then only that part of the law should be struck down. Hence the result—states will get almost full funding for a Medicaid expansion if they join, but will see no penalty for not doing so.
Long-term, this is unlikely to have any effect—what state would turn down a Medicaid expansion where the federal government pays for 90 percent of it? A decade from now, it’s incredibly hard to imagine that happening.
But the question is whether in the short-term, red-state governors will slide through the crack opened by the Supreme Court to pull out of the expansion, as the Republican Party still finds it politically valuable to fulminate and rebel against the dreaded Obamacare.
The stakes here are not small. A ProPublica analysis of an Urban Institute study found the twenty-six states that sued the federal government contain 8.5 million uninsured people who would be covered under the expansion—more than half of the total number expected to benefit.
The decision is only hours old, and as yet, no Republican governor has announced that he or she will reject the Medicaid expansion. But if anyone does it will have real impacts on many uninsured in that state—in Texas, for example, Rick Perry could yank Medicaid away from 1.8 million people who would get it under an expansion. The biggest question for healthcare reformers and the uninsured going forward is whether Perry and his cohorts will actually pull the trigger.
Read more of The Nation‘s coverage of the ruling on the Affordable Care Act:
David Cole on how and why Chief Justice John Roberts held up the individual mandate.
Ben Adler on the Republicans’ renewed attacks on Obamacare.
John Nichols on the ongoing push for Medicare-for-all.